The beauty of a fixed-income security is that the investor can expect to receive a certain amount of cash, provided the bond or debt instrument is held until maturity (and its issuer does not default).
Most bonds pay interest semi-annually, which means you receive two payments each year. So with a $1,000 bond that has a 10% semi-annual coupon, you would receive $50 (5% *$1,000) twice per year for the next 10 years.
Bond Yield Concerns
Most investors, however, are concerned not with the coupon payment, but with the bond yield, which is a measure of the income generated by a bond, calculated as the interest divided by the price. So if your bond is selling at $1,000, or par, the coupon payment is equal to the yield, which in this case is 10%.
But bond prices are affected by, among other things, the interest offered by other income-producing bonds. As such, bond prices fluctuate, and in turn, so do bond yields (For further reading, check out Bond Basics and Advanced Bond Concepts).
If I Buy A $1,000 10-Year Bond With A 10% Coupon, Will I Receive $100 Each Year?
To further illustrate the difference between yield and coupon payments, let's consider your $1,000 bond with a 10% coupon and its 10% yield ($100 / $1,000). Now, if the market price fluctuated and valued your bond to be worth $800, your yield would now be 12.5% ($100 / $800), but the $50 semi-annual coupon payments would not change.
Conversely, if the bond price were to shoot up to $1,250, your yield would decrease to 8% ($100 / $1,250), but again, you would still receive the same $50 semi-annual coupon payments.