Company A is considering a two-stage takeover of Company B. Company B has 2 million shares at current market price of 20. Company A will offer to buy 51% of Company B shares for 34 in cash and the remainder with a second bid of 980,000 convertible preferred shares, each of which will be valued at 45% more than B's common stock. A Board of Directors of Company A proposes to make a single offer for all shares of Company B at a price of 32.50 per share. Compare the total costs of the two alternatives. Which is preferred in terms of cost minimization?