Please show all work. I need to see the formulas in order to understand the question

Thank you

Watson Power Co. needs to raise $2 million as a basic source of long-term funds to run their business. The firm has the following alternatives:

Bond: to sell 20 years bond, 10% coupon rate (with semiannual coupon payment) on par value $1,000, issued at 6% discount, floatation cost is 1.5% of par and corporate tax rate is 25%.

Preferred stock: to issue stock that has a 7.5% annual dividend, floatation cost of 3.5% of $100 par value and the price of 2.5% above par.

Common stock: the current dividend is $1.50 and the market price is $56 per share. The annual growth rate of dividend is 7% and the floatation cost is $2.20.

a) Calculate the cost of each alternative of financing.

b) Which alternative should Watson Power Co. choose? Why?