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Cafe Corp. has 250,000 shares outstanding and 10,000 coupon bonds. The shares are currently priced at $72.00 each and have a beta of 0.85. The

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Cafe Corp. has 250,000 shares outstanding and 10,000 coupon bonds. The shares are currently priced at $72.00 each and have a beta of 0.85. The firm's bonds have a coupon rate of 4.5% (paid semi-annually) and 7 years to maturity. The YTM on the bonds is currently 4.5%. The expected return on the S&P TSX Composite Index is 8.5% and the risk-free rate is 1.75%. Assume Cafe Corp's marginal tax rate is 25%. The firm's WACC is percent

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