If interest rates increase due to inflation, but expected cash flows to a firm do not change, then you would expect stock prices to decline.
The current stock price is the present value of all future cash Inflows. So if the hobby fee will increase, then the discounting factor will grow, so the existing price of the destiny inflows will decrease, and the inventory charge will fall.
In economics, inflation is a popular increase in the expenses of products and services in an economic system. whilst the overall fee degree rises, each unit of foreign money buys fewer items and services; therefore, inflation corresponds to a reduction in the shopping power of money.
Higher interest costs imply better borrowing fees, human beings will sooner or later begin spending less. The call for goods and services will then drop, as a way to cause inflation to fall.
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