Examples of coupon in a Sentence
Bring in this coupon for a free oil change.
I'm always clipping coupons from the newspaper to use at the grocery store.
The coupon is good for one free ice-cream cone.
Send in this coupon for more information.
Recent Examples of coupon from the Web
Children must be accompanied by an adult and parents will receive an extra 10% off coupon to use Saturday.
All patrons ages 60 and older will get in free and receive a $2 off coupon with a $10 purchase (not applicable for alcoholic beverages).
Bailey said the coupon could be from another franchise and is not accepted at that Pizza Inn location.
The coupon is valid for a limited time (the sale ends April 30) so act fast to take advantage of these savings.
From Sunday, April 22 through Saturday, May 5, customers can bring in their old car seat to Target's Guest Services desk and receive a 20 percent off coupon for a new car seat, booster seat, car seat base, travel system or stroller.
Cici's Pizza: Use a coupon to get an adult buffet for $4.17 on Tax Day.
On April 5, buy one burrito and get another of equal or lesser value for free using printing this coupon or presenting it on your mobile device.
Up to 80% off cookware • First shopper at each location has the chance to win a $10, $100 or $500 off coupon valid through Christmas Eve.
These example sentences are selected automatically from various online news sources to reflect current usage of the word 'coupon.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.
Financial Definition of COUPON
What It Is
How It Works
The term "coupon" comes from the small detachable coupons attached to bearer bond certificates. The coupons entitled the holder to interest payments from the borrower. Coupons are rare today because most bonds are not issued in certificate form; rather, they are registered electronically (although some bondholders still choose to hold paper certificates).
Let's assume you purchase a $1,000 XYZ Company bond. The coupon rate on the bond is 5%, which means the issuer will pay you 5% interest per year, or $50, on the face value of the bond ($1,000 x 0.05). Even if your bond trades for less than $1,000 (or more than $1,000), the issuer is still responsible for paying the coupon based on the face value of the bond.
American and Japanese issuers typically make coupon payments every six months. So, in the example above, XYZ Company would pay you $25 twice a year. European issuers generally make coupon payments once per year.
Not all coupon rates stay the same over the life of a bond. Some issuers may pay interest based on a stated margin over a financial index such as the London Interbank Offered Rate (LIBOR). These floating-rate bonds typically reset their coupon rates every six months.
Not all bonds have a coupon, as is the case with zero-coupon bonds. Instead of making interest payments, companies may issue bonds at deep discounts and then pay the holder the full face value of the bond upon maturity. For example, instead of purchasing that XYZ Company bond for $1,000 and then collecting 5% interest each year, you could purchase a XYZ Company zero-coupon bond for $750, hold the bond until maturity, and receive $1,000 in return (for interest of $250). In both cases, the investor receives interest, but the zero-coupon bond investor does not receive interest until the bond matures. Note that zero-coupon issuers do not have to allocate cash to debt service (i.e., make interest payments) until their bonds mature.
Companies involved in leveraged buyouts or other transactions that result in a high level of interest burden may issue deferred-coupon bonds, whereby the issuer can avoid making far payments for a specified amount of time.
Why It Matters
Coupons are one of the defining characteristics of bonds and one of the most influential on their pricing because they give investors a way to compare bonds. For instance, the 5% coupon on the XYZ Company bond may make the bond an attractive investment if similar investments are only paying 2%. Likewise, the XYZ Company bond may not be attractive if similar investments pay 10%.
With higher interest rates, a better yield can be found other places than with bonds. This is why bond prices usually fall when interest rates increase and rise when interest rates fall. Notably, the size of a bond's coupon tends to indicate how sensitive the bond's price will be to interest rate changes. In general, the higher the coupon rate, the less the price will change when interest rates fluctuate.
COUPON Defined for English Language Learners
: a usually small piece of printed paper that lets you get a service or product for free or at a lower price
: a section of an advertisement that you can cut out and mail to a company in order to request information or to order a product or service
COUPON Defined for Kids
Origin and Etymology of coupon
Seen and Heard
What made you want to look up coupon? Please tell us where you read or heard it (including the quote, if possible).