REPLY WILLIAM STOWE
Ka’iulani Kini K. Talbot
Liberty University Online
BUSI530-B07: Managerial Finance
Dr. Stephen Lacewell
September 11th, 2022
Author Note
Ka’iulani Kini K. Talbot
I have no known conflict of interest to disclose.
Correspondence concerning this article should be addressed to
Ka’iulani Kini K Talbot.
Email: kktalbot@liberty.edu
Reply to William Stowe, Discussion Thread: Valuation Factors
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REPLY WILLIAM STOWE
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William, although I agree with you that a “company is worth what someone is willing to
pay for it”, there is more to consider for a fair valuation of a company to be true. With your
statement, you make clear that the effect of supply and demand justifies an exogenous price for a
stock concerning the economy, as the cause and effect are not well defined in regressions of
macroeconomic variables (Koh, 2017). One must consider how a company's reputation may
affect an overvaluation that may still entice the buyers to invest in such a company. In an article
by Lii and Lee, corporate social responsibility shows to be an essential variable in consumer
valuations of a firm (2012;2011;). Therefore, if a company measures the consumer variable on
how the firm is perceived, it may be able to exploit your presented statement and continue to
value the firm higher if the consumers are willing to pay for it. As Psalms 25:21 teaches us, “Let
integrity and uprightness preserve me; for I wait on thee” (KJV, 2016). With integrity and high
ethics, a company and an individual can gain the intangible factor that could potentially over-
valuate a firm and let them gain value for its customers, stakeholders, and employees.
REPLY WILLIAM STOWE
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References
King James Version (2016). The holy bible. Christian Art Publishers
Koh, W. C. (2017). How do oil supply and demand shocks affect asian stock markets?
Macroeconomics and Finance in Emerging Market Economies, 10(1), 1-18.
https://doi.org/10.1080/17520843.2015.1135819
Lii, Y., & Lee, M. (2012;2011;). Doing right leads to doing well: When the type of CSR
and reputation interact to affect consumer evaluations of the firm. Journal of Business Ethics,
105(1), 69-81. https://doi.org/10.1007/s10551-011-0948-0
