discount

Discount

The condition of the price of a bond that is lower than par. The discount equals the difference between the price paid for a security and the security's par value.

Notes:

For example, if a bond with a par value of $1,000 is currently selling for $990 dollars, it is selling at a discount.

See also: Banker's Acceptance, Discount Bond, Original Issue Discount, Premium, T-Bill, Zero Coupon Bond

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Discount

Convertible: Difference between gross parity and a given convertible price. Most often invoked when a redemption is expected before the next coupon payment, making it liable for accrued interest. Antithesis of premium.
General: Information that has already been taken into account and is built into a stock or market.
Straight equity: Price lower than that of the last sale or inside market.

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discount

The amount by which a bond sells below face value. See also below par, discount bond.

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discount

1. To adjust the value of an asset on the basis of information rather than activity or events. For example, investors may already have discounted a firm's stock price because of the anticipation of weak earnings.

2. To deduct the charge for making a loan from the loan's principal before distributing funds to the borrower.