Relationship between capital structure and asset Beta (unlevered Beta)

CFA Level I Corporate Finance
#1

Hey,
Found this written on my notes :
Asset beta is not impacted by changes in capital structure (basically D/E). Asset beta is only impacted by business risk.

However, in both Asset beta and Equity beta formulas, we can find a D/E element… Why wouldn’t Asset Beta be impacted? I mean D/E is in its denominator!

Thanks guys.

#2

What they’re saying is that the asset beta is not affected by D/E, but equity beta is.

Yes, D/E is in the formula to get asset beta from equity beta; what’s not explicit is that if D/E changes, the equity beta with which you start would change so as to offset it.