Emerging market finance doubt

As a segmented market evolves into an integrated market, equities increase in price as expected returns decrease. In other words the market integration results in low risk causing higher equity prices. I understand that the expected returns decrease, because the risk profile has decreased (from segmented market to integrated), what I don’t understand is how the decrease in expected returns cause an increase in equity prices. Your input will be appreciated.

Price = Earnings/ required return (or expected return) + growth … If earnings stay the same, as expected return decreases , price incereases … Cheers :slight_smile:

That was helpful (and straightforward!), thanks!