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Equivalent taxable yield

• The yield that must be offered on a taxable bond issue to give the same after-tax yield as a tax-exempt issue.

• The yield on a taxable security that would leave the investor with the same aftertax return he would earn by holding a tax-exempt municipal; for example, for an investor taxed at a 50% marginal rate, equivalent taxable yield on a muni note issued at 3% would be 6%.

 
 

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