What is another name for the coupon yield of a bond?

The term "coupon yield" specifically refers to the annual interest payment that a bondholder receives from the bond, expressed as a percentage of the bond's face value. This is more commonly known as the "coupon rate." The coupon rate is fixed at the time the bond is issued and represents the bond's nominal yield based on the stated interest payments.

Understanding the coupon rate's function in pricing and yield calculation is crucial for bond investors, as it directly impacts the return on investment. The coupon rate remains constant throughout the life of the bond and is important for assessing the bond's attractiveness compared to market interest rates.

While the concepts of dividend yield, interest rate, and nominal rate are related to finance, they refer to different financial instruments and aspects. Dividend yield pertains specifically to stocks and represents the annual dividends paid to shareholders relative to the stock's price. The term interest rate can refer to various types of interest across different financial contexts, but it is not specifically synonymous with the coupon yield of bonds. The nominal rate may refer to the unadjusted rate of interest before factoring in inflation or other considerations, which can lead to confusion in distinguishing between different financial terms.

Thus, the correct choice emphasizes the specific relationship of coupon yield to the bond's coupon rate