[Verse 1] Companies wear different armor, debt and equity combined Pure-play method strips away the leverage we can find Take a comparable that's clean, no borrowed money's weight Their beta shows the business risk without financial freight [Chorus] Unlever first, then relever up Business risk from financial, separate the cup Asset beta pure, equity beta mixed Advanced techniques, now your analysis is fixed [Verse 2] Hamada's formula breaks it down, the math we need to know Beta levered equals asset beta times the debt ratio One plus tax shield factor multiplied by debt to equity Unraveling the capital structure's complexity [Chorus] Unlever first, then relever up Business risk from financial, separate the cup Asset beta pure, equity beta mixed Advanced techniques, now your analysis is fixed [Bridge] Operating leverage magnifies the swings Financial leverage amplifies the stings Two different forces pushing beta higher Pure-play method helps us not get burned by fire [Verse 3] Find your proxy firms that match the business model tight Strip their leverage out to see the operational bite Then apply your target firm's own capital design Relevered beta reflects both risks combined [Chorus] Unlever first, then relever up Business risk from financial, separate the cup Asset beta pure, equity beta mixed Advanced techniques, now your analysis is fixed [Outro] Beta asset stays the same across all capital scenes Beta equity will dance with debt's financial schemes Pure-play shows the way when comparables aren't clear Advanced beta mastery is finally here
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