Investor Glossary-couponInvestor Glossary-couponInvestor Glossary-couponInvestor Glossary-couponInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Coupon

The HTML to link to this page
 

A coupon refers to the annual interest rate a bond holder is entitled to receive when purchasing a bond. In the past, most bonds had coupons which were physically attached to them. To receive their semi-annual interest payment, every six months, a bond holder would detach a coupon and redeem it for its interest payment. Although this is not the norm today, the term coupon remains. A coupon is expressed as a percentage (i.e. coupon=5.250%). Semi-annual coupon payments are equal the coupon divided by two and then multiplied by the par value of the bond (i.e. face value or principal, not the market value). Unlike the bond yield, which varies with the market value of the bond, coupon payments do not change with market conditions. Coupon payments are fixed and will remain the same until the maturity date of the bond. Although most coupon payments are issued every six months, there are coupon payments paid out at other intervals (i.e. monthly, quarterly or annually). A bond with no coupon is called a zero-coupon bond. Coupon are also referred to as coupon rate.



Rate this Coupon definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: cancelled check, stock split, ex-dividend, class C shares, balance sheet, dividends payable, deferred tax, 401a, average price per share, stock market close, VIX, current ratio, open position, EBITDA, debt service coverage, irrevocable trust, risk management, required rate of return, retained earnings, inflation, covered put, FICO score, diluted share, APR, quality assurance, 144a, in escrow, wholly-owned subsidiary, ex-dividend date, reverse mortgage, labor relations, 1035 exchange, deferred revenue, Key Rate Duration, Zero Cost Collar, 1031 exchange, option premium, phantom income, LIBOR, command economy, limit order, FTSE, minority interest, margin rate, annual return, implied volatility, real GDP, liquidity ratio, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use