A stocks price is estimated using Constant-growth Dividend Discount Model (formula below).

where P0 is the current price, D1 is the divided at time period 1, ke is the cost of equity and g is the growth rate. After a negative announcement, the growth rate g estimate decreased (new growth rate g < g) without changes in forecast of D1. This event leads to a drop in price, P0 < P0.

We conclude that: because of the bad news, the expected return for new investors (buying at the new price P0) is now lower.

Is the above statement true or false? Give explanations.