Bonds. General Question

Hi there,

Regarding bonds and SS9. Bonds coupon rates increase and prices decrease. My understanding is that when coupon rates increase on the market, the bonds price on the market will decrease and investors can snap these up. How does this impact the proceeds companies will recieve for bonds already issued? Premiums, discount etc, the bond yield and coupon rate? I know its probably a simple answer, but its literally the one thing i cant get my around!


Um . . . no. When the required rate of return on bonds (their YTM) increases, prices decrease.

No effect: they’ve already issued the bonds and gotten their money. End of story.

You sold a '64 Vette in '68 for $8,000. Last year the gentleman who bought it from you sold it at Barrett Jackson for $1.2 million. All you get is your $8,000. I hope that you invested it well.