ABC Corp. considers the following two options to raise the necessary funds for a business expansion.

Method $1$: It could issue $$20,000,000$ worth of $25-$years sinking fund bonds that pay a semi$-$annual coupon at a rate of $6\%.$ The interest rate on the sinking fund is $3\mathrm{.}5\%$ compounded semi$-$annually.

Method $2$: Alternatively, ABC Corp. could b$.$rrow the funds from a conglomerate of international banks. The banks would charge an interest rate of $5\%$ compounded annually. ABC Corp. would repay the loan with semi$-$annual payments.

The Deriodic cost of the debt using method $1$ is:

A

The periodic cost of the debt using method $2$ is: