Is CAPM beta levered or unlevered?
Also know, should I use levered or unlevered beta?
It is better to use an unlevered beta over a levered beta when a company or investor wishes to measure a publicly-traded security's performance in relation to market movements without the effects of that company's debt factor.
Similarly, does WACC use levered or unlevered beta?
Practitioner's method vs Risky-debt formula. Unlevering and relevering beta in WACC may be done in a number of ways. Levered Beta = Unlevered Beta * (1+D/E), where D/E = Debt-to-Equity Ratio of the company. The practitioner's method makes the assumption that corporate debt is risk free.
The beta (β) of an investment security (i.e. a stock) is a measurement of its volatility of returns relative to the entire market. It is used as a measure of risk and is an integral part of the Capital Asset Pricing Model (CAPM.