Debt beta is the result of the ratio of credit spread and market risk premium. If it is taken into account, the company value usually increases.
Against the backdrop of the ongoing low interest rate environment, the IDW Technical Committee for Business Valuation and Business Administration (FAUB) has adopted a clarifying addition to the Q&A on IDW S 1 i.d.F. 2008 (appendix to question 3.2.), according to which, when deriving the present value equivalent uniform base interest rate, the use of the present value factor formula given there for terms of more than 30 years requires the use of the present value factor formula given there for terms of more than 30 years that the interest rate in year 30 exceeds the estimated long-term growth rate. Otherwise, the calculation model must be based on a sufficiently long period of time to derive a uniform base interest rate equivalent to present value.