Ex Coupon

  

Categories: Stocks

"This coupon entitles you to one free, guiltless hookup with your ex, within one year of breaking up."

Not quite. In real life, it has to do with bond buying.

An interest payment from a bond is known as a "coupon." That name comes from the old days, when you would literally pull off little paper tags and bring them to the bank to get your payment. And bonds pay coupons (usually) twice a year.

Ex-coupon refers to a situation where a bond is sold, but the seller plans on keeping the next coupon payment. The buyer will get all the payments after that, just not the one directly following the sale. It also refers to the date at which the bond's holder is no longer entitled to that next coupon...same idea, just different polarity.

Selling a bond ex-coupon lowers the price slightly, of course, since there will be one less interest payment. Read all about this on the back of a box of Life Cereal.

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Finance: What is a zero coupon bond?13 Views

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Finance allah shmoop What is a zero coupon bond After

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all this time our hero remains zero Yeah dude all

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right well there was a whole song about him and

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your parentsgeneration Just ask him The coupon on a bond

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is its dividend or yield payment also known as the

00:21

rent paid by the corporation or government or individual who's

00:24

Borrowing that money sofa bond has zero coupon Does that

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mean the rental of that capital is free Uh no

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not at all Isiro coupon bond with par value of

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a thousand might sell initially for say seven hundred twenty

00:41

dollars iy a big discount to that grand the bonds

00:44

interest is on ly paid cumulatively at the very end

00:50

when the person who loaned the seven hundred twenty dollars

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gets his grand back that's it it's a one time

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payment of a thousand bucks so many years later like

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a decade of that bond yielding a bit over three

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point three percent if you did the math of compounding

01:04

well this is what it would look like Note that

01:07

the amount owed at the end of the year is

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mohr than what was owed the previous year and that

01:13

the interest is charged than on that amount Well in

01:16

real life these calculations are done twice a year with

01:19

bonds that is every six months the interest rates are

01:21

charged Zero coupon bonds yield notably more than normal bonds

01:25

which pay interests every six months Why Why With zero

01:29

coupon bonds yield mohr risk in paying some interest at

01:33

least some each six month period Well the bondholders getting

01:37

something back along the way and over time the interest

01:40

payments can be More than the principal loaned itself So

01:43

with zero coupon bonds Well there's Just a one time

01:47

payment at the very end So you'd better hope the

01:50

person showing you that money doesn't You know just decide

01:54

to skip town a week before the principal and interest

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combined Or do speaking of which i've got a flight 00:02:00.288 --> [endTime] to catch No

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