Suppose ABC stock price is currently $$120.$ Assume that the $($ex$-$dividend$)$ stock price will either

be $$135$ or $$90$ next month. $($The state will be either $$good$$ or $$bad$,$ g or b$.)$ Either way, the

firm will pay a $$7$ dividend.

$1.$ Compute the stock capital gain$/$loss$,$ CGABC,t$+1($s$),$ dividend yield, DYABC,t$+1($s$)$ and linear

return rABC,t$+1($s$)$ in the good and the bad state