Bond Fundamentals and Pricing › Bond Fundamentals and Pricing
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A bond can keep paying the same $30 coupon every six months while its market price rises or falls. The payment promise and the price are different objects: pricing asks what those future payments are worth today at the yield investors require.
Issuers use bonds to borrow from investors; bondholders are creditors rather than equity owners. In its 2026 Capital Markets Fact Book, SIFMA reports $160.7 trillion of global fixed-income debt outstanding and $157.8 trillion of global equity market capitalization for 2025. Outstanding debt and equity market capitalization measure different types of claims on issuers.
We will price a regular coupon bond, recover its yield from a price, and distinguish the quoted clean price from the full settlement amount. The floating-rate example then shows why a coupon reset alone does not guarantee a par price.