A coupon is a printed piece of paper that is exchanged for a financial discount or rebate when you purchase a product. They are issued by retailers and manufacturers of consumer packaged goods. They are widely distributed through newspapers, magazines, and the internet. They can also be obtained through the mail. Some coupons are also available through cell phones.
What Means Coupons?
A coupon is a certificate that shows a holder’s entitlement to a particular benefit, such as a cash refund or a gift. Sometimes, blueskycoupons.com will be attached to a bond certificate, which gives the holder access to periodic interest payments. Some small certificates may also be detached from bonds to redeem interest payments.
A bond’s coupon rate is expressed in annual percentages. For example, a bond with a face value of $1,000 and a coupon rate of 3% would yield an annual interest rate of $31. The coupon would be paid out as an annual payment of $30 or two semiannual payments of $15.
Although coupon bonds have fallen out of favor, they remain an essential feature of bonds. The size of the coupon determines how sensitive the bond is to interest rate changes. The higher the coupon percentage, the less susceptible it is to fluctuations in bond prices. Investors and issuers generally prefer to keep electronic records of their bonds. A bond’s coupon is the main determining factor in bond pricing. It also helps investors compare bonds.