Unlevered Beta: A Doctor's Prescription for Sound Investing
Dr. Sharma faces the challenge of balancing aggressive debt repayment with strategic investments in her medical practice and long-term wealth accumulation. She's considering expanding her practice by acquiring new equipment, but needs to assess the risk profile of this investment independently from her existing debt. Furthermore, she wants to diversify her personal investment portfolio, but lacks a clear understanding of the inherent risk associated with potential equity investments given her practice's capital structure.
By using the Unlevered Beta Calculator, Anya can isolate the business risk of her potential equipment investment and compare it to benchmarked industry averages. For example, inputting hypothetical asset and debt values reveals an unlevered beta of 0.8, suggesting lower systematic risk than the market average. Further analyzing publicly traded healthcare companies' betas with and without debt, the calculator empowers Anya to determine an appropriate risk-adjusted return when considering investments.
The Unlevered Beta Calculator utilizes a formula that removes the effect of debt from a company's beta to provide a clearer picture of its underlying business risk. Anya will input relevant financial data for comparable businesses to generate a risk profile baseline to compare to her possible investments.
$15,000 in better investment decisions annually by optimizing asset allocation based on risk assessment
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