Tavella Company is ready to sell its bonds.Which one of the following financial questions is most relevant to the issue of the bonds and that investors will most likely want answered before they purchase the bonds?
A) How many product lines did Clip Joint Company have last year?
B) What will be Clip Joint Company's cost to start operations in another city?
C) How much debt does Clip Joint Company already have?
D) Will Clip Joint Company pay dividends?

Question

Quizplus · Accepted Answer

The most relevant financial question to the issue of bonds is how much debt the company already has. Investors will want to know this information to assess the overall financial health and risk of the company before purchasing bonds. Questions about product lines and starting operations in another city are not directly related to the bond issue, and dividend payments may not be relevant to bond investors.

Tavella Company Is Ready to Sell Its Bonds