Oceňování 2018, 11(4):23-39 | DOI: 10.18267/j.ocenovani.220

Reagent function and beta coefficient in the calculation of the discount rate - part (variable level of debt and different discount rates for the tax shield)

Miloš Mařík¹, Pavla Maříková²

¹ Prof. Ing. Miloš Mařík, CSc., Katedra financí a oceňování podniku VŠE Praha, ředitel Institutu oceňování majetku VŠE Praha

² Doc. Ing. Pavla Maříková, CSc. - Katedra financí a oceňování podniku VŠE Praha

The second part of the article is aimed at presenting a complete set of functions for the calculation of the leveraged beta coefficient. While the previous first part of the article dealt with procedures appropriate at a stable level of debt, this second part of the article presents equations for the calculation of leveraged betas appropriate at a changing level of debt, for different assumptions regarding the discount rate for tax shields: a discount rate at the cost of debt, a discount rate at the level of unleveraged equity costs and, in particular, a design of a universal function enabling the valuer to choose any discount rate for tax shields. At the same time, the article explains how to apply these functions specifically, in particular how to calculate the betas of debt and betas of the tax shield that are necessary for the correct calculation of the leveraged beta.

Keywords: Value; Business valuation; Cost of equity; Beta; Tax shield; Capital structure

Grants and funding:

Článek je zpracován jako jeden z výstupů výzkumného projektu Fakulty financí a účetnictví VŠE Praha, který je realizován v rámci institucionální podpory VŠE IP100040

JEL classification: G32

Published: February 8, 2019  Show citation