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Market interest rate vs. Equity price?

Would higher market interest rate = lower equity price? As we have to discount the cash flows back at higher a rate?

It would lead to a lower justified equity price using the DDM, FCF, or RI models.

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Also consider the asset allocation part of the story… When interest rates are higher, fixed income securities may attract higher investor attention and steal some share of investments made in equities.

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上一主题:CFAI EOC Integrating Financial Statements q 15
下一主题:Schweser Level 3 Planner