"Low interest rates" trend that potentially distort how markets are pricing companies. Please discuss how it could distort firm valuation.

1. Low Interest Rates Historically low interest rates, massive stimulus in response to the global pandemic, and the rising threat of inflation are leading to questions on appropriate discount rates to value a company in its entirety its equity and its debt, including its pension obligations. Low interest rates are also fueling enormous money flows into private capital, as are lower expected returns from public markets. Private equity investors are sitting on approximately $2.5 trillion in cash, according to Preqin. That is the highest on record and more than double what it was five years ago. Looking ahead, venture capital and private equity combined ware predicted to more than double their assets from $4.4 trillion at the end of 2020 , to $9.1 trillion by 2025 . Capital flows to private equity have been accompanied by a decline in publicly traded companies. According to the Wilshire 5000 Total Market Index, the number of publicly listed U.S. stocks peaked at a record of 7,562 in 1998. At the end of 2020, there were fewer than 3,500. This decline means there are fewer public peers for business leaders to value their companies against, and less liquidity for companies as capital drains from the public capital markets