Appreciating investment valuation models (VIII)

Valuation models play a significant role in meaningful and productive investment decisions of governments, agencies of governments, management teams of corporate organisations, and investors. Discussions in the last write-up ended on the determinants of market interest rates and their impact on investment decisions and valuations.
Conceptual definition of market interest rate determinants

Real Interest Rate:

This is also called real rate of interest or real risk-free interest rate. It is the interest rate paid by debt issuers to debt holders when no inflation is expected and the security is devoid of risk. The real interest rate is often the rate offered by governments on short-term Treasury Bills in periods of no inflation. The real interest rate is not fixed; it varies with the level of economic conditions such as changes in the performance of corporate bodies; changes in the earnings expectations on productive assets by corporate borrowers; a