The coupon rate


The coupon rate is

the rate of return that a bond pays on its purchase price, i.e., Coupon Rate = Interest Payment/Bond price.

the rate of return you can expect to earn if you hold the bond to maturity.

the rate of return that the bond pay on its Par Value ($1000), i.e. Interest Payment/Par Value.

the real rate of return for saving your money and delaying consumption

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Financial Management: The coupon rate
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