What is Coupon?
1. Bonds: (1) Bearer bond’s detachable-stub (counterfoil) presented by a bondholder to the bond issuer for receiving interest payment. If coupons are exhausted before the bond’s maturity date, the bondholder may apply for a new set. Also called a warrant. (2) Registered bond’s interest rate the bond issuer promises to pay until bond matures. For example, a ’10 percent coupon’ means a 10 percent annual interest rate. Also called coupon rate.