The bond's coupon rate is 6.66%.
A bond's coupon rate may be calculated by using dividing the sum of the safety's annual coupon bills and dividing them via the bond's par fee. as an example, a bond issued with a face value of $1,000 that pays a $25 coupon semiannually has a coupon rate of 5%.
The coupon price is decided via the issuer of the bonds to the patron. The interest rate is decided by way of the lender. Coupon quotes are largely suffering from the hobby fees decided by means of the authorities. If the hobby costs are set to 6%, then no investor will accept the bonds presenting coupon price decrease than this.
The term “coupon price” specifies the charge of payment relative to a bond's par fee. Secondly, a bond coupon is often expressed in a dollar quantity. for instance, a financial institution might advertise its $1,000 bond with a $50 biannual coupon.
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