Advanced English Dialogue for Business – Equivalent taxable yield

Listen to a Business English Dialogue About Equivalent taxable yield

Mariah: Hey Michael, have you heard about equivalent taxable yield? It’s a way to compare the yield of tax-exempt investments to taxable ones.

Michael: No, I haven’t. How does it work?

Mariah: Well, it calculates the yield of a tax-exempt investment that would be equal to the yield of a taxable investment, taking into account your tax bracket.

Michael: Oh, I see. So, it helps you understand the true return on investment after accounting for taxes?

Mariah: Exactly! It’s useful for comparing different investment options to see which one offers the best after-tax return.

Michael: That sounds like a handy tool for making investment decisions. Are there any specific formulas to calculate equivalent taxable yield?

Mariah: Yes, there are formulas involving the tax rate and the yield of the tax-exempt investment. It might look a bit complex, but there are online calculators to help.

Michael: Got it. So, it’s important to consider not just the advertised yield, but also how taxes will affect your actual return?

Mariah: Precisely. Equivalent taxable yield helps you make more informed decisions by considering the tax implications of your investments.

Michael: Thanks for explaining, Mariah. I’ll definitely look into using equivalent taxable yield for my future investment choices.

Mariah: You’re welcome, Michael. It’s a useful concept to keep in mind when evaluating investment opportunities.