Which Is Better: Discount Or High Coupon Rate?

Topics:
Quantitative Analysis,
Tools and Templates
Tags:
Bond,
Coupon,
Finance,
Investment,
Kiplinger Washington Editors
Source:
Kiplinger Washington Editors

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Overview: This calculator computes rates of return, before and after taxes, for a discounted bond and high-coupon bond. Generally, you pay a price below par value (discount) for a bond that has a low coupon rate relative to market interest rates. You pay a price above par value (premium) for a bond that has a high coupon rate relative to market rates. Rates of return are shown for two scenarios: holding the bond to maturity and selling before maturity.

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Format: HTML | Date: Jan 2008

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