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4 million for 2017 and the average tax-equivalent yield of interest-earning assets from 3.
Interest income decreased USD145,000 when comparing the periods as the average tax-equivalent yield on interest-earning assets decreased from 4.
3 percent from the prior-year quarter as the average tax-equivalent yield on earning assets came in at 6.
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.
3 million for 2017, and an increase in the average tax-equivalent yield, from 4.
29% versus 3% for a 30-year Treasury bond, but the tax-equivalent yield for investors in the top 39.
If state and local income taxes were included in the calculation, the tax-equivalent yield would be even greater for many investors.
For instance, he explains that a municipal bond paying 3% interest pays a tax-equivalent yield of 4.