Face value
A bond's face value is the amount repaid at maturity and the base for its coupon calculation, typically €1,000 in a textbook problem, and it is fixed regardless of the bond's trading price.
See it move
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A bond with a €1,000 face value and a 6% coupon rate pays €1,000 × 6% = €60 a year. That face value never changes, even though the bond's market price moves above or below €1,000 as interest rates shift — at maturity, the holder receives exactly €1,000 back, plus the final coupon.
Where it fits
SubjectCorporate FinanceCoreTopicBond & Equity ValuationCore
The formula
LaTeX
Variables
- Coupon payment per period (€)
- Face value (€)
- Annual coupon rate (%)
- Number of coupon payments per year (payments)
Gives the cash coupon paid at each interest date, using the bond's face value as the base for the calculation.
Check yourself
PracticeCORE
A bond has a face value of €2,000 and an annual coupon rate of 8%, paid semi-annually. What is the amount of each coupon payment?
Select an answer to check your understanding.