Pronunciation: [bˈɒnd kˈuːpɒn ɹˈe͡ɪt] (IPA) 
The bond coupon rate is spelled /bɒnd ˈkjuːpɒn reɪt/. "BOND" is pronounced with the short o sound /bɒnd/, and "COUPON" is pronounced as /ˈkjuːpɒn/ with a long u sound. "RATE" is pronounced with the long a sound /reɪt/. The bond coupon rate refers to the interest rate paid by a bond issuer to the bondholder. It is specified in the bond's indenture and determines the interest payments made to the bondholder.
The bond coupon rate refers to the fixed annual interest rate, stated as a percentage, paid by the issuer of a bond to the bondholder. It is determined at the time of issuing the bond and remains constant throughout its term.
When an entity, such as a government or corporation, issues a bond to raise funds, they promise to pay periodic interest payments to bondholders. The bond coupon rate is the rate at which these interest payments are made. For example, if a bond has a face value of $1,000 with a coupon rate of 5%, the bondholder will receive an annual interest payment of $50 ($1,000 x 0.05).
The bond coupon rate is typically fixed to attract investors and provide them with a predictable income stream. It influences the interest income that bondholders can expect to receive, which in turn affects the market price of the bond. If the coupon rate is higher than the prevailing interest rates, the bond will be priced at a premium. Conversely, if the coupon rate is lower, the bond will sell at a discount.
The bond coupon rate is an important factor for investors when evaluating the attractiveness of a bond investment. It helps calculate the yield, which reflects the bond's overall return potential. Additionally, the coupon rate serves as the basis for determining the interest payment for each payment period until the bond matures.
