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Login Newsletters. Bonds Fixed Income Essentials. What Is a Coupon? Key Takeaways A coupon payment refers to the annual interest paid on a bond between its issue date and the date of maturity.
The coupon rate is determined by adding the sum of all coupons paid per year, then dividing that total by the face value of the bond. Compare Investment Accounts. The offers that appear in this table are from partnerships from which Investopedia receives compensation.
Related Terms Coupon Bond A coupon bond is a debt obligation with coupons attached that represent semiannual interest payments, also known as a "bearer bond. Coupon Rate Coupon rate is the yield paid by a fixed income security, which is the annual coupon payments paid by the issuer relative to the bond's face or par value. What is the Effective Yield? The effective yield is the yield of a bond which has its coupons reinvested after payment has been received by the bondholder. Bond valuation is a technique for determining the theoretical fair value of a particular bond.
Gross Coupon A gross coupon is the annual interest rate received from a mortgage-backed security or other mortgage pool security. Partner Links. Related Articles. Fixed Income Essentials When is a bond's coupon rate and yield to maturity the same?
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