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Question 186  DDM, income and capital returns

Here's the Dividend Discount Model, used to price stocks:

p0=d1rg

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, 01yr, eff 1yr g=rcapital, 01yr, eff 1yr Which of the following statements is NOT correct?