A company determines its unlevered beta by taking the equity beta (or levered beta) and unlevering it. This is done to remove the financial effects of leverage, thus reflecting the risk of the company's assets themselves, rather than the risk of the company's equity. The formula to calculate unlevered beta is: Unlevered Beta = Levered Beta / (1 + ((1 - Tax Rate) * (Debt/Equity))).
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