Unlevered Beta:
The beta of a company after subtracting out the impact of its debt obligations. Unlevered beta removes the effects of leverage usage on the capital structure of a firm, as the use of debt can lead to tax adjustments that benefit a company. By eliminating the debt component, an investor can compare the base level of risk between different companies. It is calculated by dividing the levered beta by [1 + (1 - tax rate) x (D / E)], where D/E represents the debt-to-equity ratio.