Coupon rate, Financial Management

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.

Posted Date: 9/8/2012 4:17:51 AM | Location : United States







Related Discussions:- Coupon rate, Assignment Help, Ask Question on Coupon rate, Get Answer, Expert's Help, Coupon rate Discussions

Write discussion on Coupon rate
Your posts are moderated
Related Questions
Benjamin Tang currently has holdings in the following three companies:                                                                             E(R)                      σ

I have a assignment of financial accounting Its a report on company Assignment length 2000 words

Maturity Profile Even though there is no ideal theory/concept of the maturity of the instruments, some important issues that should be considered while balancing the long-term


The amount by which the market price exceeds the conversion value or the investment value called the premium. When expressed as a percentage, it is given by,

The term 'Eurobonds' refers to bonds issued and sold outside the home country of the currency. For example, a dollar denominated bond issued in the UK is a Euro (

You've just won a huge $100 million lottery.  You've decided to invest your winnings in the following way:  $30 million in real estate,  $30 million in  corporate bonds and $40 mil

#questThe managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch. Company A; has deliberately paid no dividends

Illustrate the in brokered markets according to trade intermediation. In brokered markets: In brokered markets, brokers execute an active search function to match buyers and

Meaning merits nd demerits of modern approch of financial management