Prime Berhad needs RM$1$ million for its expansion. The firm is considering three sources of financing as follows:

i$.$ Issuing new preferred stocks which pay $9\%$ fixed dividend. The firm's preferred stock is currently selling for RM$95.$ The issuance costs is RM$5.($Assume par value of preferred stock is RM$100).$

ii$.$ Issuing new common stocks at RM$54$ per share. The firm paid a dividend of RM$3\mathrm{.}60$ per share last year to its common stockholder and investors. The dividend is expected to grow at a constant rate of $9\%$ in the future.

iii. Issuing an $8\%$ RM$1,000$ par value of bond that will mature in $15$ years. The bond floatation cost is $11\%$ of the market value which is RM$950.$ Given $27\%$ tax bracket.

Compute the cost of each of the financing alternative and advise the company on the best alternative.

$(10$ Marks$)$