Equivalent Taxable Yield

Business / Taxes / Equivalent Taxable Yield: While taxable bonds normally pay higher interest rates than tax-exempt bonds, they sometimes provide a lower overall yield. Finding the equivalent taxable yield lets you determine the minimum interest rate a taxable bond must pay to equal the yield of a comparable tax-exempt bond. The formula for the equivalent taxable yield is tax-exempt interest rate ?· (100 – your tax rate). So, for example, if a municipal bond pays an annual interest rate of 7%, and your tax rate is 35%, the equivalent taxable yield would be 7 ?· (100 – 35) = 10.8%. That means that in order to be as attractive an investment as the 7% municipal bond, a taxable bond would need to pay an annual interest rate of 10.8% or more.

Other Words for Equivalent

Equivalent Noun Synonyms: match, equal, peer, counterpart, twin
Equivalent Adjective Synonyms: tantamount, commensurate, alike, similar, close, comparable, corresponding, interchangeable, equal, synonymous, of a piece or a kind

Other Words for Yield

Yield Adverb Synonyms: surrender, give up (the fight or struggle), give in, knuckle under, submit, cede, cry quits, throw in the towel or the sponge, capitulate, succumb, raise the white flag
Yield Conjunction Synonyms: return, production, output, revenue, takings, gate, earnings, income, proceeds, profit, gain

Stripped Yield

Business / Finance / Stripped Yield: Securities that redistribute the cash flows from the underlying generic MBS collateral into the principal and interest components of the MBS to enhance their attaractiveness to different groups of inv MORE

Sustained Yield

Business / Agriculture / Sustained Yield: An output of renewable resources that does not impair the productivity of the resource: it implies a balance between harvesting and incremental growth or replenishment. MORE

Steepening Of The Yield Curve

Business / Finance / Steepening Of The Yield Curve: 1/16 (0.0625) of one full point in price. Often used in negotiations to compromise an eighth difference, and in options trading. See: Teenyo. MORE