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Coupon Definition

Coupon: The annual interest rate paid on a bond, expressed as a percentage of the face value.

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Coupon Rate Definition

Coupon rate is the yield paid by a fixed income security, which is the annual coupon payments divided by the bond's face or par value.

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Current Coupon Definition

Current Coupon: The to-be-announced (TBA) mortgage security of any issue for the current delivery month that is trading closest to, but not exceeding par value. TBA mortgage securities with the

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The Pros & Cons Of Using Coupons For Your Business

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Why Do Companies Print Coupons

Manufacturers and stores benefit from the coupons they offer to consumers. Loyalty cards are a form of coupon that allows stores to keep a record of scanned purchases. Offering coupons

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Voucher

A voucher is a document recording a liability or allowing for the payment of a liability, or debt, held by the person or company who will receive payment.

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How Mail-In Rebates Rip You Off

How Mail-In Rebates Rip You Off. FACEBOOK TWITTER LINKEDIN By. Full Bio. Bobbi Dempsey 18+ years of experience as a writer. She has written …

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Promotion Expense Definition

A promotion expense is a cost companies incur to market their products or services to consumers. Promotion expenses range from giveaways, …

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Discount Margin—DM Definition

Discount Margin - DM: A discount margin (DM) is the average expected return earned in addition to the index underlying , or reference rate, of the floating rate security. The size of the discount

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Step-Up Bond Definition

A step-up bond is a bond that pays a lower initial interest rate but includes a feature that allows for rate increases at periodic intervals. The number and extent of the rate increase, as well as

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Coupon Stripping

Coupon stripping is the separation of a bond's periodic interest payments from its principal repayment obligation to create a series of individual securities. In coupon stripping, the underlying

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Discount Rate Definition

Discount Rate: The discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from the Federal Reserve's discount window.

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Coupon Bond

Typical bonds consist of semi-annual payments costing $25 per coupon. Coupons are usually described according to the coupon rate. The yield the coupon bond pays on the date of its issuance is

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Bond Coupon Interest Rate: How It Affects Price

The coupon rate on a bond vis-a-vis prevailing market interest rates has a large impact on how bonds are priced. If a coupon is higher than the prevailing interest rate, the bond's price rises; if

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Strip Bonds Definition

Strip Bond: A strip bond is a bond where both the principal and regular coupon payments--which have been removed--are sold separately. Also known as a "zero-coupon bond."

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Ex-Coupon Definition

Ex Coupon: A bond or preferred stock that does not include the interest payment or dividend when purchased or sold. A bond that is ex coupon is sold or …

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Original Issue Discount – OID Definition

An original issue discount (OID) is the amount of discount or the difference between the original face value and the price paid for the bond.

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Bond Washing

Bond Washing: The practice of selling a bond just before it pays a coupon payment and then buying it back once the coupon has been paid. Bond washing results in a …

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12 Tips for Retiring With Just $50K Net Worth

Cut even more expenses. Maybe eat out only once per month, use more coupons, look for deals, and don't go on that expensive vacation this year. The Bottom Line .

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Bond Yield Rate vs. Coupon Rate: What's the Difference

Coupon Pass: The purchase of treasury notes or bonds from dealers, by the Federal Reserve.

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The Basics of Municipal Bonds

The most basic strategy for investing in municipal bonds is to purchase a bond with an attractive interest rate, or yield, and hold the bond until it matures. The next level of sophistication

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Zero-Coupon Bond Definition

Zero-Coupon Bond: A zero-coupon bond is a debt security that doesn't pay interest (a coupon) but is traded at a deep discount, rendering profit at maturity when the bond is redeemed for its full

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What is a stripped bond

And the purchaser of the coupons will pay $200 to receive $250, meaning they make $50 off the purchase. By providing this investment service, Ben's would receive a commission on the sale of these

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Paydown Definition

Paydown occurs when the amount a company or government repays in debt exceeds the amount it currently borrows. A paydown takes place when a company reissues unpaid debt for less than the initial

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Off-Chain Transactions (Cryptocurrency) Definition

Off-chain transactions can work by swapping private keys to an existing wallet instead of transferring funds, or by using a third-party or coupon-based interlocutor.

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Zero-Coupon Mortgage Definition

Zero-Coupon Mortgage: A form of commercial financing in which regular interest and principal payments are deferred until maturity, rather than …

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Yield to Maturity vs. Coupon Rate: What's the Difference

The yield to maturity (YTM) is the percentage rate of return for a bond assuming that the investor holds the asset until its maturity date. It is the sum of all of its remaining coupon payments. A

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Discount Definition

Discount: In finance, discount refers to the condition of the price of a bond that is lower than par, or face value. The discount equals the difference between the price paid for a security and

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Advantages and Risks of Zero Coupon Treasury Bonds

Lisa Smith is a freelance writer with a passion for financial journalism, contributing to popular media outlets like Investopedia and Bloomberg BNA. Zero-coupon U.S. Treasury bonds are …

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4 Basic Things to Know About Bonds

Yield to Maturity (YTM) As noted above, yield to maturity (YTM) is the most commonly cited yield measurement. It measures what the return on a bond is if it is held to maturity and all coupons

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The 7 Best Debt Reduction Software Programs of 2021

The average household carries more than $9,000 in credit card debt. These debt reduction programs and apps help people craft a plan to dig their way out of debt once and for all.

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Will Corporate Debt Drag Your Stock Down

Liquidity ratios are a class of financial metrics used to determine a debtor's ability to pay off current debt obligations without raising external capital. more. Capital Note.

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Can a corporation deduct dividend payments before its

Dividends and Unit Trust Taxation. Corporations may not legally deduct the dividend payments before taxes but there is another approach: a corporate structure called an income trust. Income trusts

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Debt Tender Offer Definition

A debt tender offer is a public solicitation to a company's bondholders requesting that they sell back their bonds or debt securities at a specific …

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Buying a $1,000 Bond With a Coupon of 10%

These bonds typically pay out a semi-annual coupon. Owning a 10% ten-year bond with a face value of $1,000 would yield an additional $1,000 in …

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Introduction To STRIPS

An investment bank purchases $100 million of these securities and peels off the 60 semiannual interest payments of $3.5 million each. The bank …

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Exoneration

Exoneration: In a general sense, this term means to free from blame or guilt, such as when a criminal is proven innocent. In the financial realm, exoneration usually means to relieve one of a

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Simple Math Terms for Fixed-Coupon Corporate Bonds

This means a $1,000 corporate bond that has a fixed 6% coupon pays $60 a year for the duration of the bond. Most interest payments are made semiannually. So in …

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Accounts Receivable (AR) Discounted Definition

Accounts Receivable (A/R) Discounted: Outstanding invoices representing money owed to a creditor which the firm/creditor sells to a buyer for less than face value , typically to quickly raise

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Here’s how the Firestone credit card works, including

The Bottom Line. As a store card, the Firestone credit card offers cardholders a convenient way to pay for car repairs, maintenance, tires, and other purchases at …

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How the Kohl's Credit Card Works: Benefits and Rewards

Kohl’s often offers cash-off coupons, such as $10 off purchases of $30 or more. These may be combined with other discounts, as well as Kohl’s rewards programs.

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On-The-Run Treasuries Definition

Off-the-run Treasuries are those that have been issued before and remain outstanding. A Treasury transitions from on-the-run to off-the-run once a newer set of Treasuries is released for sale. How

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3 signs that it's time to sell your bonds

Expand. 1. Interest Rates Set to Rise. 2. The Issuer Seems Unstable. 3. The Market Price Is High. Investing can be tricky, even when it comes to so-called "safe" investments such as bonds. When a

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Here's What Happens When a Bond Is Called

Then, the borrower decides to retire the bond. If the call premium is one year's interest, 10%, you'll get a check for the bond's face amount ($1,000) plus the premium ($100). In relation to the

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Accrual Bond Definition

Accrual Bond: A bond that does not pay periodic interest payments. Instead, interest is added to the principal balance of the bond and is either paid …

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Calculating Yield to Maturity of a Zero-Coupon Bond

Consider a $1,000 zero-coupon bond that has two years until maturity. The bond is currently valued at $925, the price at which it could be purchased today. The formula would look as …

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The Dangers of Taking Out a Direct PLUS Loan

Danger 4: They're Impossible to Get Out of, Even in Bankruptcy. There is no escaping a Direct PLUS Loan, so not making payments and letting a …

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22 Ways to Fight Rising Food Prices

Hold off on your shopping until after you've had a chance to clip coupons from the Sunday paper. Shopping during the evening or early morning …

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