Generally, for the purposes of levering and unlevering betas, you would not include Minority Interest (NCI) as part of the D/E portion. The reason is because the existence (or lack thereof) of MI does not impact Net Income, whereas altering D to E ratio would impact Net Income and therefore EPS and ... Generally, for the purposes of levering and unlevering betas, you would not include Minority Interest (NCI) as part of the D/E portion. The reason is because the existence (or lack thereof) of MI does not impact Net Income, whereas altering D to E ratio would impact Net Income and therefore EPS and therefore volatility in the earnings stream and ultimately, valuation.

For sure, MI is to be included as a form of capital when calculating TEV. Read More

Great, thank you. In addition, how should preferred stock be treated when levering and unlevering beta?

Finally, how should cash be treated when levering and unlevering beta?

1) If the preferred stock is tax deductible then you treat it exactly as debt; that is, (1-T)(D/E + P/E). If prefs are not tax deductible then don't tax effect it; that is, (1-T)(D/E) + P/E

2) Cash is generally ignored when levering and unlevering betas