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The coupon rate is
the amount of interest the bondholder will receive periodically. For example
if the nominal value of the bond is RM100,000 and the coupon rate is 7%,
then the bondholder will receive an annual interest of RM7,000. If the
agreed periodic payment is every six months, then the bondholder will
receive RM3,500 every six months.
Remarks: Corporate Bonds or loan stocks are long term
fixed interest income debt securities income debt securities issued by
companies. They usually have a lifespan of five years and are redeemable at
par value on maturity. Bond and loan stock issues vary in many ways and have
many optional features. Some are secured by collateral, others are backed by
guarantees; yet others have no collateral support and are only unsecured
promises to pay. In addition, the bond indenture may provide that the bond
may be redeemable at a specified price.
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