each year the loan was outstanding, your friend paid you 100 in interest. As a potential purchaser of bonds, you desire to know the coupon rate to compare this with other investments of similar risk to see if the offering is attractive to you. The initial loan amount is the par value. Unlock Content, over 75,000 lessons in all major subjects. This is the same as the interest rate you requested. The bonds will mature in five years, and potential lenders may compare the coupon offered by the XYZ Company bonds with similar offerings to see if it would be a wise decision. Bond the payment is made twice a year.
This yield changes as the value of the bond changes, thus giving the bond's yield to maturity.
Definition of Coupon rate in the Financial Dictionary - by Free online English dictionary and encyclopedia.
Definition : Coupon rate is the stated interest rate on a fixed income security like a bond.
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Word count: nsfw Not Suitable For Work, please check the nsfw box if your meaning contains: Swearing or profanity, content not suitable for children. 0 0, in bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year. For investors acquiring the bond on the secondary market, depending on the prices they pay, the return they earn from the bond's interest payments may be higher or lower than the bond's coupon rate. This is the effective return called yield to maturity. 0 0, the annual rate of return on a legal claim or financial asset (usually a bond) stated as a percent of par value. See also, matching words, words containing the letters c, words containing the letters c,o. The coupon rate was sufficiently high to mention the strategy of increasing our bond position to upper management this week.
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