Financial Definition of Zero Coupon Bond
Meaning of Zero Coupon Bond
Such a debt security pays an investor no interest. It is sold at a discount to its face price and matures in one year or longer.
Legal Definition of Zero Coupon Bond
A bond that pays no interest but is priced, at issue, at a discount from its redemption price.
Related Entries of Zero Coupon Bond in the Encyclopedia of Law Project
Browse or run a search for Zero Coupon Bond in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.
Zero Coupon Bond in Historical Law
You might be interested in the historical meaning of this term. Browse or search for Zero Coupon Bond in Historical Law in the Encyclopedia of Law.
Legal Abbreviations and Acronyms
Search for legal acronyms and/or abbreviations containing Zero Coupon Bond in the Legal Abbreviations and Acronyms Dictionary.
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| Related topics | Zero Coupon Bond in the World Encyclopedia of Law |
What is Zero Coupon Bond?
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United States Tax Concept of Zero Coupon Bond
Zero-coupon bonds are bonds priced at a large discount from face value. The difference between the purchase price and the face value is your interest. If you buy a zero-coupon bond, every year as it gets closer to maturity the bond increases in value. You pay tax annually on this increase in value, which you recognize as interest income.
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