Printer Friendly
Dictionary, Encyclopedia and Thesaurus - The Free Dictionary
3,898,227,727 visitors served.
forum Join the Word of the Day Mailing List For webmasters
?
Dictionary/
thesaurus
Medical
dictionary
Legal
dictionary
Financial
dictionary
Acronyms
 
Idioms
Encyclopedia
Wikipedia
encyclopedia
?

after-tax equity yield

    0.01 sec.
After-Tax Equity Yield
The yield on an investment in real estate after subtracting taxes and other charges. One calculates the after-tax equity yield by taking the proceeds from the sale of real estate, subtracting expenses (such as paying off the remaining mortgage), and adding back in the cash flow that the real estate generated while one owned it. One then subtracts the total taxes owed on the profit from the sale and the cash flow and expresses the result as a percentage of the original investment.

after-tax equity yield

Methods of financial analysis for an equity position in real estate, being the net return rate on an investment after deducting expenses,interest,and taxes.

Example: An investor buys a property with $100,000 down (equity) and $400,000 in financ- ing. The investor receives $7,000 in cash flow each year, after paying income taxes on money earned from the investment. After 5 years, the investor sells the property and receives $150,000 after deducting mortgage balance, taxes, and sale costs. The investor received a return of the orig- inal $100,000 and a sale profit of $50,000 upon sale, plus the $35,000 received over the course of 5 years, for a total of $85,000.

After quantifying the various components, one then calculates yield by using any of several formulas,such as cash-on-cash and internal rate of return.



Want to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit the webmaster's page for free fun content.
?Page tools
Printer friendly
Cite / link
Feedback
Add definition
Mentioned in?  References in periodicals archive?   Financial browser?   Full browser?
No references found
 
12) Further, market-derived after-tax equity yields should be used, because these are the yields actually used by investors who establish financial yields and values.
 
 
 
Financial Dictionary
?

Terms of Use | Privacy policy | Feedback | Advertise with Us | Copyright © 2012 Farlex, Inc.
Disclaimer
All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional.