Coupon

Business, Legal & Accounting Glossary

Definition: Coupon


Quick Summary of Coupon


Rate of interest payable on a loan.



What is the dictionary definition of Coupon?

Dictionary Definition


  1. obsolete A certificate of interest due, printed at the bottom of transferable bonds (state, railroad, etc.), given for a term of years, designed to be cut off and presented for payment when the interest is due; an interest warrant.
  2. finance Any interest payment made or due on a bond, debenture or similar (no longer by a physical coupon).
  3. A section of a ticket, showing the holder to be entitled to some specified accommodation or service, as to a passage over a designated line of travel, a particular seat in a theatre, a discount, etc.

Full Definition of Coupon


A coupon refers to the annual interest rate a bondholder is entitled to receive when purchasing a bond. In the past, most bonds had coupons which were physically attached to them. To receive their semi-annual interest payment, every six months, a bondholder would detach a coupon and redeem it for its interest payment. Although this is not the norm today, the term coupon remains. A coupon is expressed as a percentage (i.e. coupon=5.250%). Semi-annual coupon payments are equal the coupon divided by two and then multiplied by the par value of the bond (i.e. face value or principal, not the market value). Unlike the bond yield, which varies with the market value of the bond, coupon payments do not change with market conditions. Coupon payments are fixed and will remain the same until the maturity date of the bond. Although most coupon payments are issued every six months, there are coupon payments paid out at other intervals (i.e. monthly, quarterly or annually). A bond with no coupon is called a zero-coupon bond. Coupon are also referred to as coupon rate.


Synonyms For Coupon


voucher, ticket, bon, check, note

Cite Term


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https://payrollheaven.com/define/coupon/
Modern Language Association (MLA):
Coupon. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. May 25, 2020 https://payrollheaven.com/define/coupon/.
Chicago Manual of Style (CMS):
Coupon. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/coupon/ (accessed: May 25, 2020).
American Psychological Association (APA):
Coupon. PayrollHeaven.com. Retrieved May 25, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/coupon/

Definition Sources


Definitions for Coupon are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February, 2020 | 0 Views.