Chloe owns a risky stock and anticipates earning 10 percent on her investment in that stock. The risk free rate is now about 1 percent. Which one of the following best describes the 2 percent rate, the difference between these two rates, which is called ? O The market rate O The real return O The expected return O The risk premium on that stock Cowardly Lion Enterprises is an all-equity capital structure. The interest rate on new debt is 9 percent and there are no taxes. Shareholder Rita Cavendish knows that Cowardly Lion has not moved to becoming a levered firm. Rita wants to change the cash flows to mimic what Cowardly Lion's cash flows would be if it were a levered firm. How could she do this using Homemade Capital Stucture? Rita could sell all of her shares and lend all of the money at 9% to recreate Cowardly Lion's levered recapitalization. Rita could send a letter of complaint to the Board of Directors asking them to use debt. Rita could sell some of her Cowardly Lion shares and lend the money received at 9% to mimic Cowardly Lion's recapitalization if it had used debt. Rita could borrow at 9% and then purchase more Cowardly Lion shares to create a levered holding, similar to if Cowardly Lion's had decided to use leverage