I would see no problem with doing so. Regarding connection, the general recommendation when the option is available is to use coax over toslink unless you have problem with EMI or RFI. Another general recommendation is to use a coax length of less than 8” or more than 1.5 meter. The latter is easier to find.
Placement of DAC
I am considering trying an outboard DAC as a possible upgrade . Due to logistics ( i.e. the size of my rack) I would probably have to place the dac on top of my cd player. Any downside to this? CD player does not get warm, not worried about heat. Also, what is the current preference re: simple interface between the two: coax or fibre-optic? Thanks in advance for any help.