Coupon Rate: How does a bond issuer decide on the appropriate coupon rate to set on its bonds? Explain the difference between the coupon rate and the required return on a bond.© BrainMass Inc. brainmass.com June 3, 2020, 11:09 pm ad1c9bdddf
It is the interest rate stated on a bond when it's issued. Hence it is the interest rate paid on the bond. It is decided by looking various factors affecting the demand and supply of the organization's bond. Some of the factors are:
1) Economic situation
2) Organization's financial position
3) Interest rate scenario
4) Investor's ...
Response discusses the difference between the coupon rate and the required return on a bond.