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

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FREEA bond purchased at a premium will have a yield to maturity that is lower than its coupon rate. YTM represents the average return of the bond over its remaining lifetime. ...Show details

Created: 14 days ago

Coupon Rate - Learn How Coupon Rate Affects Bond Pricing

Provided by : corporatefinanceinstitute.com

FREEConversely, if prevailing interest rates fall below the coupon rate the bond is paying, then the bond increases in value (and price) because it is paying a higher return on investment than an investor could make by purchasing the same type of bond now, when the coupon rate would be lower, reflecting the decline in interest rates. ...Show details

Created: 14 days ago

Coupon Rate - investopedia.com

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FREEIf the market rate turns lower than a bond's coupon rate, holding the bond is advantageous, as other investors may want to pay more than the face value for the bond's comparably higher coupon rate. ...Show details

Created: 15 days ago

Discount Rate vs Required Rate of Return - Financial

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FREEThe discount rate and the required rate of return represent core concepts in asset valuation. These terms are most frequently used when comparing the market price of an asset vs the intrinsic value of that asset to determine if it represents a suitable investment. We highlight what each term means and why they represent similar but distinctively different concepts in asset valuation. ...Show details

Created: 14 days ago

If Coupon Rate Is Higher Than Rate Of Return

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FREEb If the coupon rate is higher than the required return on Provided by : coursehero.com FREE b. If the coupon rate is higher than the required return on a bond, the bond will sell at a premium, since it provides periodic income in the form of coupon payments in excess of that required by investors on other similar bonds. ...Show details

Created: 1 month ago

Coupon Rate Formula | Step by Step Calculation (with Examples)

Provided by : wallstreetmojo.com

FREEBased on the coupon rate and the prevailing market rate of interest, it can be determined whether a bond will trade at a premium, par, or discount. A bond trades at a premium when the coupon rate is higher than the market interest rate, which means that the price of the bond will fall because an investor will be reluctant to purchase the bond ...Show details

Created: 14 days ago

Coupon Rate vs Interest Rate | Top 8 Best Differences

Provided by : wallstreetmojo.com

FREEBonds with low coupon rates will have higher interest rate risk than bonds that have higher coupon rates. For example, consider a bond with a coupon rate of 2% and another bond with a coupon rate of 4%. Keeping all the features the same, bond with a 2% coupon rate will fall more than the bond with a 4% coupon rate. Maturity affects interest ...Show details

Created: 14 days ago

Bond Coupon Interest Rate: How It Affects Price

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FREEConversely, a bond with a coupon rate that's higher than the market rate of interest tends to rise in price. If the general interest rate is 3% but the coupon is 5%, investors rush to purchase the ...Show details

Created: 15 days ago

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

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FREECoupon rates are influenced by government-set interest rates. A bond’s yield is the rate of return the bond generates. A bond’s coupon rate is the rate of interest that the bond pays annually. ...Show details

Created: 14 days ago