## Calculate coupon payment rate

14 Nov 2016 We have already examined the calculation of Excel Duration and Price functions when the settlement date equals a coupon payment date in  By convention we refer to the \$100 loan amount as the bond's principal, or par value, while the \$10 interest payment is referred to as the coupon payment and  Here is a simple online calculator to calculate the coupon percentage rate using the face value and coupon payment value of bonds. The term coupon refers to a value which is affixed to bond certificates and are detachable from the bonds. Each bond has a face value, and a certain percentage of this face value (eg, 3 %) is paid as a coupon value for that bond.

For example, if a bond has a par value of \$1,000 and generates two \$30 coupon payments each year, the coupon rate is (\$30 x 2) ÷ \$1,000, or 0.06. Once the cell format is adjusted, the formula yields a return rate of 6%. Coupon Rate is calculated by dividing Annual Coupon Payment by Face Value of Bond, the result is expressed in percentage form. The formula for Coupon Rate – Coupon Rate = (Annual Coupon (or Interest) Payment / Face Value of Bond) * 100 A bond's coupon rate can be calculated by dividing the sum of the security's annual coupon payments and dividing them by the bond's par value. For example, a bond issued with a face value of \$1,000 that pays a \$25 coupon semiannually has a coupon rate of 5%. Annual Coupon Rate is the yield of the bond as of its issue date. Annual Market Rate is the current market rate. It is also referred to as discount rate or yield to maturity. If the market rate is greater than the coupon rate, the present value is less than the face value.

## The coupon payment on each of these bonds is \$32.5 [=\$1,000 × 6.5% ÷ 2]. This means that Walmart Stores Inc. pays \$32.5 after each six months to bondholders. Please note that coupon payments are calculated based on the stated interest rate (also called nominal yield) rather than the yield to maturity or the current yield.

By convention we refer to the \$100 loan amount as the bond's principal, or par value, while the \$10 interest payment is referred to as the coupon payment and  Here is a simple online calculator to calculate the coupon percentage rate using the face value and coupon payment value of bonds. The term coupon refers to a value which is affixed to bond certificates and are detachable from the bonds. Each bond has a face value, and a certain percentage of this face value (eg, 3 %) is paid as a coupon value for that bond. Coupon rate is calculated by adding up the total amount of annual payments made by a bond, then dividing that by the face value (or “par value”) of the bond. For example: ABC Corporation releases a bond worth \$1,000 at issue. Every six months it pays the holder \$50. To calculate a coupon payment, multiply the value of the bond by the coupon rate to find out the total annual payment. Alternatively, if your broker told you what the bond yield is, you can multiply this figure by the amount you paid for the bond to work out the annual payment.