The 'sound financial theory' is that this is simply how the math of the DCF model works. As the Fed Funds Rate rises, the discount rate in the DCF model rises, which means shorter-term cash flows become more important than longer-term ones. Thus, the current dividend yield matters more, while the growth rate and terminal value matter less. A higher dividend yield typically means a lower P/E ratio, and that's why value matters more than growth as Fed fund rate rises.