For a business, how is a beta calculated using other companies? Is it just an average of their betas? Thanks in advance.
I'm thinking you might be wanting something like what these people are discussing in the below links. Take levered betas, unlever them, take an average (or maybe a weighted average?), then re-lever for your specific company. Depends on the end goal, I think. Check the textbook! http://www.wallstreetoasis.com/forums/levered-vs-unlevered-beta http://pages.stern.nyu.edu/~adamodar/New_Home_Page/lectures/pvt.html http://faculty.babson.edu/goldstein...fall2011/LEVERING AND UNLEVERING BETAS II.pdf http://www.ehow.com/how_5108226_calculate-unlevered-beta.html http://www.valuationcalcs.com/BetaLevering/LeveredUnleveredBetasWS.asp
It depends what it is for and who is asking. Various online sources for company betas calculate beta differently so you need be aware of how the beta is derived if you aren't calculating it yourself.
