Debt Beta from Credit Spreads Rather than Assuming Zero Debt Beta

This article addresses computing and using debt beta when deriving the unlevered beta (Bu), the all-equity cost of capital (Ku) and the WACC. I describe how you can compute the debt beta (Bd) from credit spreads and how you can also estimate the debt beta from the debt to capital ratio. Computing the debt beta … Continue reading Debt Beta from Credit Spreads Rather than Assuming Zero Debt Beta