Question:

How do you calculate beta?

Answer hidden.

Answer:

Normally, you would come up with a new estimate for beta based on the set of Public Comps you’re using to value the company

You look up the Beta for each comparable company, un-lever each one, take the median of the set, and then lever that median based on the company’s capital structure

Then you use this Levered beta in the Cost of Equity calculation

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