When bonds interest rate rose from 7 to 14 percent than this have effect on the price of company's shares?

Question

Suppose interest rates on Treasury bonds rose from 7 to 14 percent as a result of higher interest rates in Europe. What effect would this have on the price of an average company’s common stock?

Answer 1

It depends on the company performance and its stock prices and inflation.

Check this website:
http://www.centman.com/Library/Articles/Nov99/InterestRates&Inflation2.html

It gives a detail information regarding bonds and inflation, and then it discuss the relationship between bonds and common stocks prices.

In a summary of what they suggest is that if the return on the bonds is better than the returns on the stock then share holders will sell their stocks to obtain bonds, which affects the company stock negativly.