Bond ValuationBonds are long-term debt securities that are issued by corporations and governmententities. Purchasers of bonds receive periodic interest payments, called couponpayments, until maturity at which time they receive the face value of the bond and thelast coupon payment. Most bonds pay interest semiannually. TheBondIndentureorLoan Contractspecifies the features of the bond issue. The followingterms are used to describe bonds.Par or Face ValueThe par or face value of a bond is the amount of money that is paid tothe bondholders at maturity. For most bonds the amount is $1000. It alsogenerally represents the amount of money borrowed by the bond issuer.Coupon RateThe coupon rate, which is generally fixed, determines the periodiccoupon or interest payments. It is expressed as a percentage of the bond'sface value. It also represents the interest cost of the bond issue to theissuer.Coupon PaymentsThe coupon payments represent the periodic interest payments from thebond issuer to the bondholder. The annual coupon payment is calculatedbe multiplying the coupon rate by the bond's face value. Since mostbonds pay interest semiannually, generally one half of the annual couponis paid to the bondholders every six months.Maturity DateThe maturity date represents the date on which the bond matures,i.e.,thedate on which the face value is repaid. The last coupon payment is alsopaid on the maturity date.Original MaturityThe time remaining until the maturity date when the bond was issued.Remaining MaturityThe time currently remaining until the maturity date.44