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How to calculate annual coupon payment?

Understand the Problem

The question is asking how to calculate the annual payment received from a bond (the coupon payment). To find this, you typically multiply the bond's face value by the coupon rate.

Answer

Multiply the bond's face value by its annual coupon rate.

The final answer is to multiply the bond's face value by its annual coupon rate.

Answer for screen readers

The final answer is to multiply the bond's face value by its annual coupon rate.

More Information

The annual coupon payment is a key component in assessing the return from a bond. A higher coupon rate means a higher fixed return.

Tips

Make sure not to confuse the coupon rate with the current yield or yield to maturity, which are different concepts.

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