Coupon rate
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Coupon rate
In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.
Coupon Rate
The interest rate that a bond pays to a bondholder, usually semi-annually. The coupon rate is stated on the bond. This is also called the nominal yield or the yield rate.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Coupon rate.
The coupon rate is the interest rate that the issuer of a bond or other debt security promises to pay during the term of a loan. For example, a bond that is paying 6% annual interest has a coupon rate of 6%.
The term is derived from the practice, now discontinued, of issuing bonds with detachable coupons.
To collect a scheduled interest payment, you presented a coupon to the issuer or the issuer's agent. Today, coupon bonds are no longer issued. Most bonds are registered, and interest is paid by check or, increasingly, by electronic transfer.
Dictionary of Financial Terms. Copyright © 2008 Lightbulb Press, Inc. All Rights Reserved.