Faculty News

Professor Aswath Damodaran discusses how interest rates affect the values of stocks and bonds

The New York Times Logo
Excerpt from The New York Times -- "When interest rates are lower, earnings are worth more and share prices tend to rise, said Aswath Damodaran, a finance professor at New York University, who has explained this truth in elaborate formulas, many of which he posts on his website. But the simplest way of looking at it, he says, and the most important for an investor, is to consider how interest rates affect the value of a stock and a bond. 'Low rates have had a big effect on the stock market,' he said. 'Stock is much, much cheaper than bonds at today’s interest rates.'"

Read more