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Tag: Hamada Equation

An image of Professor Robert Hamada as a stormtrooper, guarding an unlevered beta with the Hamada equation shielding it from market volatility

Understanding the Hamada Equation: Analyzing a Firm’s Cost of Capital with Financial Leverage

December 2, 2024 FinanceFacts101 Corporate Finance

Background on the Hamada Equation Robert Hamada, an esteemed professor at the University of Chicago Booth School of Business since 1966, introduced a groundbreaking equation for evaluating a company’s cost of capital in relation to its financial leverage in his paper published in the Journal of Finance in May 1972.

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