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    Coupon rate and the required return on a bond

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    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.

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    https://brainmass.com/business/internal-rate-of-return/coupon-rate-required-return-bond-265645

    Solution Preview

    Coupon:

    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 ...

    Solution Summary

    Response discusses the difference between the coupon rate and the required return on a bond.

    $2.19

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