Analyzing the Capital Structure of Airbnb

Qinyu Liu

Co-Presenters: Individual Presentation

College: College of Business and Public Management

Major: BS.FINANCE

Faculty Research Mentor: Kakolyris, Andreas  

Abstract:

This study aims to explore the effect of levered beta on Airbnb’s WACC and overall market value to inform an optimal capital structure decision. Airbnb is one of the world’s largest home-sharing and short-term accommodation platforms, making it a valuable subject for study. The model in this research uses the synthetic rating method and collects data from the Bloomberg Terminal to evaluate variations in levered beta and financing costs under different debt scenarios and assess how financing choices influence the company’s value and risk level. As in prior literature, reasonable adjustments in leverage may not significantly affect the cost of capital. However, they may impact a firm’s financial flexibility and long-term strategy. This example emphasizes the importance of maintaining a balance between debt and equity financing to support the sustainable growth of the company while effectively controlling risk. The results of the analysis are presented and examined in this poster.