What is the difference between coupons and dividends?
2006-10-10 08:28:49 · 3 answers · asked by hotteenick 3 in Business & Finance ➔ Investing
a coupon is typically associated with bonds (a debt investment) whereas dividends are associated with stocks (equity investment)
if you invest in bonds, you will redeem coupons that represent the interest earnings on those bonds.
if you invest in stocks, the board of directors of that company may declare some of its profits paid to shareholders in the form of dividends.
2006-10-10 08:37:22 · answer #1 · answered by loveholio 5 · 3⤊ 0⤋
Coupons are generally associated to bond and dividends are associated to stocks. You don't hear much about coupon bonds very often anymore, but they are still available. You actually have to redeem those coupons to earn your interest money... a cumbersome task that has almost entirely disappeared from the investment world. Excellent question, by the way... I retired from the brokerage business, and not many folks are even aware of coupons.
2006-10-10 22:37:16 · answer #2 · answered by Mike S 7 · 2⤊ 0⤋
Coupon are the interest payment on a bond or debenture
Dividend is the portion of the companys profit that is distributed to the shareholders. This is usually declared as percentage of the face value of the share and is in effect the income of the shareholder earns on his investment
2006-10-11 00:32:34 · answer #3 · answered by shankar raman 2 · 0⤊ 0⤋