Can anyone explain the term Rd/ro in the gain of this amplifier?
This is better suited for a comment, but I am as yet unable to do that so in lieu of other answers thus far I will give my 2c. 

You need to look at the small signal model for your transistors, they use ro to symbolise the small signal output impedance. When you draw out the model with Rd and ro the equation will make sense. 
I apologise for not having the resources to do that for you right now but I'm sure other more comprehensive answers won't be too far away.