• Leveraged beta (commonly referred to as simply beta or equity beta) is a measure of market risk. Debt and equity are taken into account when assessing a company’s risk profile.

  • The unleveraged beta removes the debt component to isolate the risk associated solely with the company’s assets.
  • A high debt-to-equity ratio usually leads to an increase in the risk associated with the company’s shares.
  • Beta 1 means the stock is as risky as the market, while betas greater than or less than 1 reflect risk thresholds higher or lower than the market, respectively.