Tax-Equivalent Yield financial definition of Tax-Equivalent Yield. Tax-Equivalent Yield finance term by the Free Online Dictionary.

Tax-equivalent yield

The pre-tax yield required from a taxable bond in order to equal the tax-free yield of a municipal bond.

Tax-Equivalent Yield

The yield of a taxable investment that equals the yield of a tax-free investment with a lower stated yield. A corporate bond yields less than its stated interest rate because of taxation whereas a tax-exempt municipal bond does not. Thus, a municipal bond that pays a lower interest rate will often net the bondholder more than a corporate bond with a slightly higher interest rate, depending upon one's tax bracket. The tax equivalent yield is the extra yield required on a corporate bond to equal the post-tax yield of a municipal bond. See also: Municipals-over-bonds spread, After-tax basis.

tax-equivalent yield

The pretax yield that provides the same return as a specified aftertax yield. Tax-equivalent yield is calculated by dividing tax-free yield by the difference obtained from subtracting the applicable tax rate from 1. For example, for an investor who pays taxes at a rate of 40%, an aftertax yield of 6% has a tax-equivalent yield of 0.06/(1 - 0.4), or 10%.

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Corporate Equivalent Yield Equivalent Taxable Yield	Recognizing that the spread required to induce the investor to hold both types of bonds is increased by the risk premium, we can define it as the difference between the yield on the municipal bond and the expected tax-equivalent yield on the corporate bond. The effect of risk-aversion on the portfolio allocation between ... by Mantell, Edmund H. / American Economist Treatment of a portion of the dividends as long-term capital gains has the effect of providing individual preferred stockholders with a higher ordinary income tax-equivalent yield. Royce Value Trust, Inc. Declares Fourth Quarter Dividend on its 5.90% ... by Business Wire Treatment of a portion of the dividends as long-term capital gains has the effect of providing individual preferred stockholders with a higher ordinary income tax-equivalent yield. Royce Focus Trust, Inc. Declares Fourth Quarter Dividend on its 6.00% ... by Business Wire	tax shelter Tax Shield Tax Software Tax Status Election tax stop Tax Straddle Tax Swap Tax Table Tax Treaty Tax Umbrella Tax Value tax year Tax-Appraised Value Tax-Deductible Tax-Deductible Interest Tax-Deferred Account Tax-Deferred Annuity Tax-Deferred Contribution tax-deferred exchange Tax-Deferred Income Tax-Deferred Retirement Plan Tax-Deferred Retirement Plans Tax-Efficient Fund Tax-Efficient Funds Tax-Equivalent Income Tax-Equivalent Yield Tax-Exempt Bond Tax-Exempt Commercial Paper Tax-Exempt Income Tax-Exempt Income Fund Tax-Exempt Interest Tax-Exempt Money Market Fund Tax-Exempt Property Tax-Exempt Sector Tax-Exempt Security tax-free exchange Tax-Free Income Tax-Free Investment Tax-Loss Selling Tax-Managed Mutual Fund Tax-neutrality Tax-Sheltered Annuity Tax-Sheltered Income Tax-Timing Option Taxa de cambio Taxa de cambio de equilibrio Taxa de cambio efetiva Taxa de inflacao Taxa de juro do cupom Taxa de juros Taxa de redesconto	tax-and-spend Tax-Appraised Value Tax-Appraised Values Tax-Benefit Microsimulation Model for Germany Tax-cut tax-deductible tax-deductible tax-deductible tax-deductible tax-deductible Tax-Deductible Interest tax-deferred tax-deferred Tax-Deferred Account Tax-Deferred Accounts Tax-Deferred Annuities tax-deferred annuity tax-deferred annuity Tax-Deferred Contribution Tax-Deferred Contributions tax-deferred exchange Tax-deferred income Tax-deferred income Tax-Deferred Incomes Tax-Deferred Retirement Plan Tax-deferred retirement plans tax-efficient fund Tax-efficient funds Tax-Equivalent Income Tax-Equivalent Incomes Tax-Equivalent Yield Tax-Equivalent Yields Tax-exclusive Tax-exclusive Tax-exclusive Tax-exclusive tax-exempt tax-exempt tax-exempt Tax-exempt bond Tax-Exempt Bonds Tax-Exempt Capital Accumulator bonds Tax-Exempt Capital Markets Tax-Exempt Commercial Paper Tax-Exempt Commercial Paper Tax-Exempt Fuel Users Tax-Exempt Fund of California Tax-Exempt Governmental Entity Tax-exempt income Tax-exempt income fund Tax-Exempt Income Funds Tax-Exempt Incomes Tax-Exempt Interest Tax-exempt money market fund Tax-Exempt Money Market Funds Tax-exempt organization Tax-exempt organization Tax-exempt organization Tax-Exempt Organizations Tax-Exempt Organizations Tax-Exempt Properties

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Corporate Equivalent Yield
Equivalent Taxable Yield

Recognizing that the spread required to induce the investor to hold both types of bonds is increased by the risk premium, we can define it as the difference between the yield on the municipal bond and the expected tax-equivalent yield on the corporate bond.

The effect of risk-aversion on the portfolio allocation between ... by Mantell, Edmund H. / American Economist

Treatment of a portion of the dividends as long-term capital gains has the effect of providing individual preferred stockholders with a higher ordinary income tax-equivalent yield.

Royce Value Trust, Inc. Declares Fourth Quarter Dividend on its 5.90% ... by Business Wire

Treatment of a portion of the dividends as long-term capital gains has the effect of providing individual preferred stockholders with a higher ordinary income tax-equivalent yield.

Royce Focus Trust, Inc. Declares Fourth Quarter Dividend on its 6.00% ... by Business Wire