Taxable equivalent yield
Definition:
The return from a higher-paying but taxable investment that would equal the return from a tax-free investment. This depends on the investor`s tax bracket. ...
TAXABLE EQUIVALENT YIELD - The interest rate that must be received on a taxable security to provide the holder the same after-tax return as that earned on a tax-exempt bond.
Taxable equivalent yield: A term used primarily with municipal bonds, which are tax-exempt. The taxable equivalent yield is calculated to provide an easy means of comparing tax-exempt bonds with taxable bond yields.
Taxable Equivalent Yield
If you are an average investor interested in bonds, you may have a difficult time deciding between fully-taxable corporate bonds or tax-free municipals.
Taxable Equivalent Yield (in banking)
Nontaxable Dividends (business term)
Tax-Exempt Money Market Fund (finance term)
Disqualified Person (Tax-Exempt Organization) (insurance term)
501-(C)(3) Bond (finance term)
Territory Bond (finance term) ...
Alternatively, one can calculate the taxable equivalent yield of a municipal bond and compare it to the yield of a corporate bond as follows: ...
The tax-equivalent yield calculator can help you determine the taxable equivalent yield on a tax-exempt bond when you input your state, income and tax filing status.
 See also: Yield, Income, Return, Bond, Security
  
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