Grosvenor Ltd. has the following securities outstanding:

i. $1,000,000 bond with 10 percent coupon rate.

ii. $1,000,000 of cumulative preferred shares with a 6.5 percent dividend rate.

What effect would payments to investors for each security have on the income statement? What would be the net cash cost of each security? Assume that Grosvenor has a tax rate of 30 percent.