Unlevered beta
The beta of the business without the effect of debt: the sensitivity to the market the company would have if it were financed by shareholders alone.
How to read the number
Lets an analyst take peers' betas, strip out their debt, and apply the result to the capital structure of the company being valued.
When the metric lies
Stripping assumes the debt is risk-free and the tax effect constant. For a heavily indebted company that assumption stops holding.
Also known as: asset beta