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Part $1$

Suppose this morning SPB$$ Ltd$.,$ a solar panel and battery manufacturing$$ company, paid a dividend of $$$$3$ per share. At $10$ a$.$m$.$ SPB announced its latest earnings results$($which were unexpectedly$$ good$)$ and management seems very happy. One year$$ ago, SPB paid for and implemented the Stealth Disposal$($SD$)$ project for handling its toxic waste. Only$$ SPB$\text{'}$s management is aware of the SD project. The project has reduced$$ SPB$\text{'}$s expenses related to toxic waste$$ disposal, but there is a$25\%$ chance of toxic contamination of the drinking water for the nearest city. SPB management has no intention of publicly disclosing that the SD project exists. Following this$$ morning's $10$ a$.$m$.$ quarterly earnings$$ announcement, SPB$\text{'}$s earnings growth prospects look very good based upon substantial cost savings$($although investors$$ don't know$$ it$,$ these cost saving are due to the SD$$ project$).$ SPB$\text{'}$s earnings announcement has caused investors to reassess$$ SPB$\text{'}$s dividend growth with the new expectation that dividends will grow by $0\mathrm{.}6\%$ each quarter. Prior to the$$ announcement, dividends were expected to grow by $0\mathrm{.}5\%$ each quarter. In$$ addition, given$$ investors' perceived risk of$$ SPB$,$ the equity cost of capital for SPB is $14\%($effective annual$$ rate$).$ Complete parts a through f below.