Calculating Cost of Preferred Stock. Cutler Bank has an issue of preferred stock with a $6.50 stated dividend that just sold for $90 per share. What is the bank's cost of preferred stock? Calculating WACC. Urlacher Corporation has a target capital structure of 65 percent common stock, 10 percent preferred stock, and 25 percent debt. Its cost of equity is 15 percent, the cost of preferred stock is 6 percent, and the cost of debt is 7.5 percent. The relevant tax rate is 35 percent. a) What is Urlacher's WACC? b) The company president has approached you about Urlacher's capital structure. She wants to know why the company doesn't use more preferred stock financing, since it costs less than debt. What would you tell the president