Here's the Dividend Discount Model, used to price stocks:
p0=d1r−g
All rates are effective annual rates and the cash flows (d1) are received every year. Note that the r and g terms in the above DDM could also be labelled: r=rtotal, 0→1yr, eff 1yr g=rcapital, 0→1yr, eff 1yr Which of the following statements is NOT correct?