yield equivalence

Yield equivalence

The interest rate at which a tax-exempt bond and a taxable security of similar quality give the investor the same rate of return.

yield equivalence

Equal aftertax returns on different investments. As an example, for an investor in a 25% marginal tax bracket, a corporate bond with a taxable return of 8% has yield equivalence with a tax-free bond returning 6%.
References in periodicals archive ?
Therefore, automakers suggest that EPA evaluate the possibility of a voluntary program beginning with the 1998 model year that could yield equivalence to adoption of California standards in the Northeast.