The yield that must be offered before factoring in taxes so that an investment pays off a certain after-tax yield. This measure is often necessary to compare taxable and tax-free investments, since tax-free issues tend have lower pre-tax yields due to the fact that the investment's proceeds will not be reduced by taxes. Tax equivalent yield is equal to required after-tax yield divided by (1 minus the tax rate).
Related information about tax equivalent yield:
- Tax-Equivalent Yield Definition | Investopedia
The pretax yield that a taxable bond needs to possess for its yield to be equal to that of a tax-free municipal bond. This calculation can be used to fairly compare ...
- Tax Equivalent Yield Calculator
Bankrate.com provides a FREE tax equivalent yield calculator and other TEY calculators to view the yield of your municipal bonds.
- Tax-equivalent yield formula
Oct 19, 2004 ... This formula helps you determine whether tax-free or taxable money market funds make sense in your situation.
- Individual Investors - Taxable Equivalent Yield Calculator
The basic appeal of municipal bonds is that the interest income is exempt from regular federal income taxation and, in some cases, state taxation as well.
- What is my tax-equivalent yield? | Calculators by CalcXML
Tax-free investments such as municipal bonds have lower yields due to their tax- exempt status. Use this calculator to determine an equivalent yield on a taxable ...
- Vanguard - Tax-equivalent yield calculator
Compare the yield of a taxable fund to an equivalent tax-exempt fund.
- Tax-equivalent yield converter
CNNMoney guide to investing in bonds. Everything you need to know about bond investing.
- How to Calculate Tax-Equivalent Yield | AllFinancialMatters
Oct 20, 2006 ... Let's say you have the choice between two fixed-income options: A 5.00% taxable yield or a 4.50% tax-free yield. We'll also assume that you ...