PE Expectations are often depended on prevailing interest rates. Higher the interest rates fund will tend to shift towards debt instruments unless shares start trading at matching PE Ratios.
As a result of current TB rates being 33% p.a, stock market investors expect target buying companies to have PER of 3X or less. 100/33 = 3
If the interest Rates were at 25%p.a then PER Expectation would be 4X or less. 100/25 = 4.
In case if TB Rates reach 50% then investors would be looking for companies with a PER of 2X or less. 100/50 = 2
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