Coupon rate, Financial Management

Assignment Help:

Bonds pay interest periodically at a pre-specified rate of interest. The annual rate at which this interest is paid is known as the coupon rate or simply the coupon. Interest may be paid monthly, quarterly, half-yearly, annually or at some other frequency. For example, a bond with a face value of Rs.1,000 with a 10% coupon payable semi-annually will pay Rs.50 as interest every six months. The dates on which the interest payments are made are known as coupon due dates. Coupon rate is also known as nominal rate. In addition to indicating the coupon payments that the investor can expect to receive over the term of the bond, the coupon rate also affect's price sensitivity to changes in market interest rates.

         Coupon = Coupon rate x Par value of bond.


Related Discussions:- Coupon rate

Explain that many u.s. firms simply do not hedge, Recent surveys of corpora...

Recent surveys of corporate exchange risk management practices point out that many U.S. firms simply do not hedge. How would you explain this result? Answer:  There can be severa

Explain significance of international financial management, Why is it impor...

Why is it important to study international financial management? Answer:  We are now living in a world in which all the main economic functions, that are production, consumption,

Interest rate risk for floating-rate securities, In a fixed-rate coup...

In a fixed-rate coupon bond, the change in the price can be attributed to the change in the market interest rates. This change is due to the difference in the pre

Advantages and disadvantages of pay back period, Advantages: It is ...

Advantages: It is easy to calculate and catch. With the help of this technique, projects can be ranked in terms of their economic merits without much of complication.

Longer-term bonds and short-term bonds, Questions How is a bond like...

Questions How is a bond like a loan?                                               How does an investor receive a return from buying a bond?  Does a bond's yield to ma

Operational cycle, using the operating cycle and any other financial manage...

using the operating cycle and any other financial management knoweledge,dicuss the applicability of such a cycle to the poultry biussiness in uganda (consider broilers)

Graphical method, The graphical method is a simple one, and is the mo...

The graphical method is a simple one, and is the most easily understood of the several linear programming methods. A thorough knowledge of the graphical procedure

Panera bread company, Analysis of the financial statements and accounting p...

Analysis of the financial statements and accounting policies of "Panera" Bread company, in APA format, containing: Financial Statements -Discuss the main financial statemen

International financial system, International financial system has always b...

International financial system has always been a debatable and crucial focus of the world discussion and it is mainly due to the repression of the economies especially after the cu

''a'' priori probability, 'A' Priori Probability This is a probability ...

'A' Priori Probability This is a probability computed by rationally examining existing information. A priori probability can most simply be explained as making a conclusion on

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd