Clip Joint 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

Investors will most likely want to know how much debt the company already has before purchasing its bonds as it will give them an idea of the company's ability to pay back its debts and the level of risk associated with investing in the bonds. The other options are not directly related to the bonds or the company's ability to repay them.

Clip Joint Company Is Ready to Sell Its Bonds