A company is formed with a total authorised (authorised by its inclusion in the Memorandum of Association) share capital of £500,000, consisting of 300,000 £1 ordinary shares and 100,000 5% £2 preference shares. If the company wishes to raise £400,000 in capital. Identify the number of shares of each type it should issue to minimise the preference dividend payment in each of the following circumstances:

1 All shares are to be issued at par.

2 Ordinary shares are to be issued at a premium of 25p and preference shares at a premium of 50p.