how can i calculate unlevered beta of an industry?

when i calculate the beta of an industry i take the average of beta of all the companies in the industry. however, i assume this method would give me levered beta. is this correct? is this easy way to calculate the unlevered beta of the same industry?

1 Answer(s)


Yes when you just take average beta you will get the levered beta.
The formula to calculate unlevered beta is βL = βU + [1 + (1 - t)(d/e)]
T is tax rate of the company
d/e is the debt-equity ratio of the company
by doing this you eliminate the effect of debt on the capital structure of the company.