1. Company A primarily sells coffee. It recently introduced a new coffee-flavored liquor. Suppose the firm faces a tax rate of 35% and collects the following information.

	Beta	%Debt
Company A	1.13	71%
A standard Coffee Liquors Company	0.93	89%

If it plans to finance 89% of the new liquor-focused division with debt and the rest with equity, what WACC should it use for its liquor division? Assume a cost of debt of 5.64%, a risk-free rate of 5.63%, and a risk premium of 7.8%.