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Finance Dictionary and Glossary of Investment Terms
equivalent taxable yield
Definition 1.
The yield needed on a taxable investment in order to match the tax-free return offered on a municipal bond; calculated by dividing the tax-exempt yield by (1 minus the investor's marginal tax rate). also called yield equivalence.
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Definition 2.
The yield that must be offered on a taxable bond issue to give the same after-tax yield as a tax-exempt issue.
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