Asset beta, by definition, reflects the beta of a company without debt. It is sometimes referred to as unlevered beta. For some companies, there are financial benefits to adding debt to the company. Using asset beta allows the evaluation of the volatility of a company's stock without this debt benefit. By reviewing the unlevered beta, you will have a better idea of the market risk of a company's stock.

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Use Yahoo! Finance or Google Finance to obtain a specific company's beta. For either site, enter the company's name or stock symbol to bring up that company's stock data. In Yahoo! Finance, click on "Key Statistics". Click on "Beta," which is listed on the right under "Trading Information." In Google Finance, the beta is listed in the right-hand column of numbers above the graph.

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Calculate the company's debt-to-equity ratio by dividing its debt by its equity. These numbers can be found on the company's balance sheet. For example, if a company has total long-term debt of $20 million and total shareholder equity of $25 million, then the debt-to-equity ratio is $20 million/$25 million, which equals 0.80.

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Calculate the company's tax rate by dividing the income tax paid by net income before taxes. These numbers can be found on the company's income statement. For example, if the income tax paid was $1 million and the net income before taxes was $3 million, then the company's tax rate is $1 million/$3 million, which equals 0.33.

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Calculate the asset beta using the following equation:

Asset beta = B/(1+(1-T)*(R)), where "B" is the company's beta, "T" is the tax rate and "R" is the debt to equity ratio.

Using the previous examples and a company beta of 0.7, the asset beta is 0.7/((1+1-0.33)*(0.8)). Therefore, 0.7/((1.66)*(0.8)), then 0.7/1.336, which equals 0.52.