Hello

In the notes, they state that the price of an equity investment can be expressed as \(price = \frac{dividend}{dividend \space yield}\). This does not mean that it is the only formula for the price of an equity, just that it is the way they are looking at the price of equity in this section in order to make their point. The formula for the price of an equity which you give is also correct, and is simply another way to express the price of an equity.

As for the expression \(1+i = (1+d)(1+g) \), this is not related to equities in particular, but rather it is a comment on the fact that when an asset has both an income yield (d) and capital growth (g), the expected return should be written multiplicatively (as in the expression given), but sometimes to simplify matters an assumption of \(i = d + g\) is used instead.

Hey,

Also, by definition:

dividend yield = (dividend/price). They just rearranged this formula.The

pricehere could have been calculated using the perpetuity formula you've mentioned.