Coupon payment question?
When a company uses bonds as a financing method, there is the coupon payment and the interest expense.
The coupon payment is an actual cash outflow and the interest expense is not a cash outflow? Is this right? Why do we have the interest expense, is this just used to amortize the premium/discount on the bond?
Then, regarding cash flow statements the coupon payment is treated as an interest payment and taken out of the CFO…?
Thank you in advance for your help.
Study together. Pass together.
Join the world's largest online community of CFA, CAIA and FRM candidates.