A bond'scoupon rateis the rate of interest it pays annually, while its yield is the rate of return it generates. A bond's coupon rate is expressed as a percentage of its par value. The par value is simply the face value of the bond or the value of the bond as stated by th...
its current and nominal yields are both 7%. If the bond later trades for $900, the current yield rises to 7.8% ($70 ÷ $900). The coupon rate, however, does not change, since it is a function of the annual payments and theface value, both of which are constant. ...
Bond Yield Yield to Maturity (YTM) Yield to Call (YTC) Yield to Worst (YTW) Current Yield Bond Yield Analysis Par Value Coupon Rate Annuity Perpetuity Growing Perpetuity Inverted Yield Curve Interest Rate Structure Interest Rate Risk Simple Interest Compound Interest Annual Percentage Yield (...
A coupon rate is just one part of determining if a bond is worth investing in. Learn more about them inside.