That means that on January 1, 2010, XYZ Company will pay you (or whomever you happen to sell the bond to) the face value (also called the par value ) of quizlet the maturity date of a note receivable the bond.
Bonds with maturities of less than 10 years are typically essex local government pension called notes.
Coupon, the coupon rate is the periodic interest payment that the issuer makes during the life of the bond.In this case: a 500 coupon divided by the 10,500 face value, for a yield to maturity.76.This is for a couple of reasons.To illustrate, consider the situation of an investor who in 1986 bought a 30-year Treasury bond with a maturity date of May 26, 2016.Since bonds trade on the open market best online dating site netherlands from their date of issuance until their maturity, their market value will typically be different than their maturity value.It is also the termination or due date on which an installment loan must be paid in full.However, barring a default, investors can expect to receive the maturity value at the specified maturity date, even if the market value of the bond fluctuates during the course of its life.
All else equal, its bonds would rise in price, say to 10,500, and the yield would fall (since prices and yields move in opposite directions ).
It is possible to buy and sell a bond in the open market prior to its maturity date.For example, if an entity issues two million bonds with a 100 face price, the issue size is 200 million dollars.Let's assume that on January 1, 2000, you purchased an XYZ Company bond that had a 10-year maturity.An exchangeable bond, on the other hand, allows the bondholder to exchange the bonds for the stock of a company other than the bond issuer.Issue date, the issue date is simply the date on which a bond is issued and begins to accrue interest.In this way, a bonds coupon and its actual yield are not necessarily the same.Yield to Maturity, since bonds trade on the open market, the actual yield an investor receives if they purchase a bond after its issue date (the yield to maturity) is different than the coupon rate.The maturity date represents the point at which the issuing party must return the principal or par value associated with the security, in addition to all unpaid interest.Represented by the security certificate.For example, call provisions allow an issuer to redeem, or call, a bond or preferred stock before it matures.
Some bond and preferred stock maturities are short-term (a year or less others are intermediate-term (usually two to 10 years) and many are long-term (a period of 10 to 30 years or more).
The issue size reflects both the borrowing needs of the entity issuing the bonds, as well as the markets demand for the bond at a yield thats acceptable to the issuer.