NOI vs. Discount Rate

CFA Level II
#1

In Schweser it says “Implicit in the cap rate or multiplier are expected increases in growth”

But the formula of a cap rate is

Cap rate = discount rate - growth…

So this would mean that expected increases in growth is not implicit in the cap rate… Can someone help clarify this?

#2

Because you use the cap rate to value a perpetuity, so in effect it assumes a constant growth (mathematically at least)