TAX EQUIVALENT YIELD Definition

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TAX EQUIVALENT YIELD is 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 to have lower pre-tax yields due to the fact that the investments proceeds will not be reduced by taxes. Tax equivalent yield is equal to required after-tax yield divided by (1 minus the tax rate).

Learn new Accounting Terms

OWNED RECEIVABLES is receivables carried on the balance sheet of the institution. See MANAGED RECEIVABLES.

NET PURCHASES are those items purchased less returns, discounts and allowances on those purchases.

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