Financial Dictionary Calculators Articles. Coupon Rate.
What is Coupon Rate?
What it is: How it works Example: Why it Matters: Popular Now. What is a Small-Cap Stock? Profiting from Options. The Advantage of Tax-Advantaged Funds. Value Traps vs. Bargains -- How to Spot the Difference.
The ABC's of Stocks. Not all bonds have coupons. Such bonds make only one payment: Normally, to compensate the bondholder for the time value of money , the price of a zero-coupon bond will always be less than its face value on any date before the maturity date.
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During the European sovereign-debt crisis , some zero-coupon sovereign bonds traded above their face value as investors were willing to pay a premium for the perceived safe-haven status these investments hold. The difference between the price and the face value provides the bondholder with the positive return that makes purchasing the bond worthwhile.
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Between a bond's issue date and its maturity date also called its redemption date , the bond's price is determined by taking into account several factors, including:. From Wikipedia, the free encyclopedia.
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Principles in Action. Upper Saddle River, New Jersey The payment is based on its face value.
Coupon (bond) - Wikipedia
How much the return will be assuming the bondholder keeps it until it matures. In other words, assuming the bondholder does not sell it earlier.
A yield to maturity calculation factors in the coupon rate. Yield to maturity tells you what your average return will be over the remaining term of the bond. Coupon rate — definition and meaning The coupon rate is the interest rate that the issuer of a bond pays, which normally happens twice a year.
Related coupon rate means
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