A/An _____ Is a Contract Purchase That Is Made on a Continuing

question 49

Multiple Choice

A/An _____ is a contract purchase that is made on a continuing basis for a specified or indefinite period of time, typically exceeding one year.

• A)one-time buy
• B)short-term contract
• C)spot contract
• D)long-term contract
• E)None of these answers.

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Definitions:

Face Value

The nominal value printed on a bond or security which indicates its worth at maturity but does not necessarily reflect its market value.

Weighted Average Cost of Capital (WACC)

The average rate of return a company is expected to pay its shareholders and debt holders, weighted according to the proportion of equity and debt in the company's capital structure.

Return on Equity

A financial ratio indicating the profitability of a company relative to its shareholders' equity, calculated as net income divided by shareholders' equity.

Weighted Average Cost of Capital (WACC)

A calculation of a firm's cost of capital in which each category of capital (debt, equity, etc.) is proportionately weighted, representing the average rate that a company is expected to pay for all its financing sources.