Skip to content

Ask the Tutor ACCA AFM

debt beta

RRichard8y ago
Dear Sir sorry to bother you again In the asset beta calculation and the ungearing calculation where for exam purposes the debt beta is zero. Where would I find the real debt betas and how to apply them
John MoffatJohn MoffatTutor8y ago#1
Debt betas will not be zero in practice, but will always be very low. Although equity betas are published, I don't know of anyone who publishes debt betas - they are not really of any relevance to anyone anyway. They would be applied in exactly the same way as equity betas - the debt beta would determine the return required by investors.
Sign in to reply to this topic.