A firm has determined its optimal capital structure which is composed of the following sources.

Preferred Stock:

The firm has determined it can issue preferred stock at RM$75$ per share par value. The stock will pay a RM$10$ annual dividend. The cost of issuing and selling the stock is RM$3$ per share.

Common Stock:

The firm$$s common stock is currently selling for RM$18$ per share. The dividend expected to be paid at the end of the coming year is RM$1\mathrm{.}74.$ Its dividend payments have been growing at a constant rate of $3\%$ for the last four years. It is expected that to sell, a new common stock issue must be underpriced, with floatation costs of RM$1$ per share.

Based on the above information, what is the firm$$s cost of preferred stock and cost of a new issue of common stock? Which of the two sources offers a lower cost? Show your workings.