Again, keep in mind our "apples-to-apples" theme. When you look up the Betas on Bloomberg (or from whatever source you're using) they will be levered to reflect the debt already ASSUMED by each COMPANY.

But each company's capital structure is different and we want to look at how "risky" a company is regardless of what % debt or equity it has.

To GET that, we NEED to un-lever Beta each time.

But at the end of the calculation, we need to re-lever it because we want the Beta used in the Cost of Equity calculation to reflect the true risk of our company, TAKING into account its capital structure this time.

Again, keep in mind our "apples-to-apples" theme. When you look up the Betas on Bloomberg (or from whatever source you're using) they will be levered to reflect the debt already assumed by each company.

But each company's capital structure is different and we want to look at how "risky" a company is regardless of what % debt or equity it has.

To get that, we need to un-lever Beta each time.

But at the end of the calculation, we need to re-lever it because we want the Beta used in the Cost of Equity calculation to reflect the true risk of our company, taking into account its capital structure this time.