Coupon rate
Coupon Rate
Credit & DebtThe fixed annual interest a bond pays as a percentage of its face value. It is set at issue and does not change with the market price.
Formula
Annual Coupon = Coupon Rate x Face Value
Why it matters
Confusing coupon with yield is a common error: a bond's return depends on the price paid, not just the coupon printed on it.
Indian example
Related terms
Learn the concept
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