Hi,

For a private company, and assuming my target capital structure is the industry’s average capital structure, why do I even unlever and relever the beta?

I get a sample of 10 comps, get the average levered beta of them, then unlever that beta at the average capital structure of them, then relever the beta at the average capital structure of them? It’s the same… I unlever at 50% and then relever at 50%… my levered beta is the same as the industry’s. Why would everybody say to unlever and then relever the beta?

Thanks