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From: deaner@dicomed.UUCP (Dave Deaner)
Newsgroups: net.invest
Subject: Tax free yield/non tax-free yield
Message-ID: <453@dicomed.UUCP>
Date: Mon, 15-Apr-85 14:11:18 EST
Article-I.D.: dicomed.453
Posted: Mon Apr 15 14:11:18 1985
Date-Received: Tue, 16-Apr-85 06:01:28 EST
Organization: DICOMED Corp., Minneapolis
Lines: 16


For you municipal bond freaks out there the formula to figure out if a
non-taxable yield from a tax-free municipal is equivalent to a non tax-
free investment is:

Taxable yield = non-taxable yield/100 - tax rate

example:

to find out what the taxable yield on a 4.5% munie in a 40% tax bracket
divide 4.5 by 60(100-40) and you get 7.5.

Therefore to get the same kind of yield from a taxable investment the re-
turn would have to be 7.5%

Dave Deaner