Coupon rate: Difference between revisions

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The nominal annual rate of interest on a security, expressed as a percentage of the principal amount.
The nominal annual rate of interest on a security, expressed as a percentage of the principal amount.
<span style="color:#4B0082">'''''Coupon rate example'''''</span>
The annual interest payable on a bond is 3.
The principal amount is 100.
Coupon rate = annual interest / principal
= 3 / 100
= '''3%'''
Working in the other direction:
Coupon rate x principal = annual interest
For example:
3% x 100 = 3


== See also ==
== See also ==
* [[Capped FRN]]
* [[Capped FRN]]
* [[Coupon]]
* [[Current yield]]
* [[Nominal annual rate]]
* [[Par]]
* [[Par]]
* [[Par bond]]
* [[Par bond]]
* [[Par yield]]
* [[Principal]]
* [[Principal]]
* [[Yield]]
* [[Yield to maturity]]


[[Category:The_business_context]]
[[Category:Corporate_finance]]
[[Category:Investment]]
[[Category:Long_term_funding]]
[[Category:Financial_products_and_markets]]

Latest revision as of 21:55, 6 August 2020

The nominal annual rate of interest on a security, expressed as a percentage of the principal amount.


Coupon rate example

The annual interest payable on a bond is 3.

The principal amount is 100.


Coupon rate = annual interest / principal

= 3 / 100

= 3%


Working in the other direction:

Coupon rate x principal = annual interest

For example:

3% x 100 = 3


See also