1.The annual interest paid on a debt security. A coupon is usually stated in terms of the rate paid on a bond's face value. For example, a 9% coupon, $1,000 principal amount bond would pay its owner $90 in interest annually. A coupon is set at the time a security is issued and...
the prepayment rate that will produce the same CFY as that of the benchmarkcoupon; and forcoupons lower than the benchmarkcouponthe lowest prepayment rate that will do so. Current yield For bonds or notes, thecouponrate divided by the market price of the bond. Cushion bonds High-couponbonds...
Define coupon. coupon synonyms, coupon pronunciation, coupon translation, English dictionary definition of coupon. n. 1. A code or detachable part of a ticket, card, or advertisement that entitles the holder to a certain benefit, such as a cash refund or
Definition of Coupon Bond in the Financial Dictionary - by Free online English dictionary and encyclopedia. What is Coupon Bond? Meaning of Coupon Bond as a finance term. What does Coupon Bond mean in finance?
Coupon rate: A fixed-income security's nominal yield is expressed as a coupon rate. It refers to the annual coupon payments made by the issuer in... Learn more about this topic: Coupon Rate Definition, Formula & Examples from Chapter 11/ Lesson 11 ...
The coupon rate is the amount of annual interest income paid to a bondholder, based on the face value of the bond. Government and non-government entities issuebondsto raise money to finance their operations. When a person buys a bond, thebond issuerpromises to make periodic payments to the ...
In finance, a certain threshold or condition that must be met for a coupon to be paid or activated in structured products. For example: “The bond had a coupon barrier set at an inflation rate of 2%, ensuring that the coupon would only be paid if inflation exceeded that level.” ...
Bond coupon rate definition Before we dive into explaining the coupon rate definition, we need to first discuss what a bond is. For many business entities out there, issuing bonds is the easiest way to acquire money from investors or the market. We call it debt financing. Investing in bonds...
The coupon rate is the rate of interest that is paid on the bond’s face value by the issuer. The coupon rate is calculated by dividing the Annual Interest Rate by the Face Value of the Bond. The result is then expressed as a percentage. Coupon Rate=(Annual Interest Rate/Face Value of...
Zero-coupon bond price = Maturity value ÷ (1 + required interest rate)^number years to maturity How Does the IRS Tax Zero-Coupon Bonds? Imputed interest, sometimes referred to as "phantom interest," is an estimated interest rate. The imputed interest on the bond is subject to income tax....