The existing capital structure of Royal Ltd is as under:

The existing rate of return on the company's capital employed is $15\%$ and the income tax rate is $25\%.$ The company requires a sum of $20,00,000$ to finance its expansion programme for which it is considering the following alternatives.

a$)$ Issue of equity shares at $100$ per share

b$)$ Issue of $11\%$ preference shares.

c$)$ Issue of $9\%$ debentures.

It is estimated that the $\frac{P}{E}$ ratios in the case of equity, preference and debenture financing could be $25,18$ and $15$ respectively. Which of the above alternative would you consider to be the best and why?