Gary Schurman (Applied Business Economics) discusses the derivation of the theory behind the Butler Pinkerton Calculator in his article, “Derivation of The Butler-Pinkerton Model”. Schurman presents the financial theory behind a private company beta (also known as total beta or adjusted total beta) to account for sub-optimal diversification (no diversification or partial diversification).  Click here for the free analysis—it’s the first download in the “articles” list.