Series 52: 6.2.3. After-Tax Yield

6.2.3.  After-Tax Yield

Similarly, if you are looking at a corporate bond and want to know its yield after federal taxes have been paid, you will want to know its after-tax yield. After-tax yield is a bond’s rate of return after subtracting out federal, state, and local taxes. Analysts apply after-tax yield when comparing investment alternatives for the obvious reason that it is an accurate measure of real returns and compares alternatives on an equal basis. After-tax yield is calculated as follows:

after-tax yield = pre-tax yield x (1&nbs