Question

should we consider negative D/E ratio in calculating Levered Beta ?

Answer 1

D/E ratio should be market values when calculating levered beta. I don't see how this ratio can be negative

Answer 2

you can consider negative ration only in a short period...never for long period

Answer 3

I assume that you are using net debt and market equity to come to a negative D/E ratio. In that case, it is perfectly consistent to use the negative D/E ratio and end up with a levered beta that is lower than your unlevered beta... (the cash pulls the beta of equity down ...)