If interest rates are 10%, you can borrow $1000 and buy a company that generates a $100 dividend and be cash neutral. Make sense? Now if interest rates drop to

If interest rates are 10%, you can borrow $1000 and buy a company that generates a $100 dividend and be cash neutral. Make sense? Now if interest rates drop to 1% you can spend $10k on the same company, get the same $100 and pay your loan. So the value of a company that reliably generates $100 can change by a factor of 10 when interest rates change. Right now, the real interest rate is basically zero. So to determine what a company is worth, work out how much capital it generates and divide by almost-zero. Hence why every company is work billions...