One BAB Futures Contract Trading at 92

question 69

Multiple Choice

One BAB futures contract trading at 92.09 has a contract value of:

• A)$980 869
• B)$981 723
• C)$981 540
• D)$981 209
• E)$980 140

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Definitions:

WACC

The Weighted Average Cost of Capital (WACC) refers to the average rate of return a company is expected to pay to its security holders to finance its assets.

Debt Ratio

The debt ratio is a financial metric that measures the extent of a company’s leverage, calculated by dividing total liabilities by total assets.

Cost of Debt

The effective rate that a company pays on its current debt, included in capital structure calculations to assess overall cost of capital.

Cost of Equity

The return that investors expect for investing in a company's equity, representing the compensation for the risk taken.