What is Asset Beta?
Asset Beta A measure of the systematic risk of a firm's assets, excluding the effects of leverage; used in cost of capital calculations and risk assessment.
Source: CFA Institute, IFRS Foundation, FASB (GAAP), Basel III Framework
How is “Asset Beta” Used in Practice?
In valuation, analysts calculate asset beta to isolate business risk from the effects of the company's financial leverage.
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Who Needs to Know This Term?
- Financial Analysts
- Bankers
- Traders
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What is Asset Beta?
A measure of the systematic risk of a firm's assets, excluding the effects of leverage; used in cost of capital calculations and risk assessment.
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