Two years ago, a new public limited company was formed with the following share capital: 1m nominal value in cumulative preference shares; current market value of 4m. 20m nominal value in ordinary shares; current market value of 50m. The cumulative preference shares have an annual dividend rate of 3%. At the end of the companys first financial year, no dividends were paid on any shares. Now, at the end of its second financial year, the company has declared a dividend rate for ordinary shares of 5% for that year. The total dividend cost to the company on all of its shares at the end of this second financial year (ignoring taxes) is:

A 1.03m

B 1.06m

C 2.62m

D 2.74m