Bond Basics: Coupons, Face Value, Maturity, and Forms
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11 Terms
Coupons
The stated interest payment made on a bond.
Coupon rate
The annual coupon divided by the face value of a bond.
Face Value
The principal amount of a bond that is repaid at the end of the term. Also called par value.
Par Value
The principal amount of a bond that is repaid at the end of the term. Also called face value.
Maturity
The specified date on which the principal amount of a bond is paid.
Yield to maturity (YTM)
The rate required in the market on a bond.
Current Yield
A bond's annual coupon divided by its price.
Registered form
The form of bond issue in which the registrar of the company records ownership of each bond; payment is made directly to the owner of record.
Bearer form
The form of bond issue in which the bond is issued without record of the owner's name; payment is made to whoever holds the bond.
Debenture
An unsecured debt, usually with a maturity of 10 years or more.
Note
An unsecured debt, usually with a maturity under 10 years.