How do I calculate tax equivalent yield?
How do I calculate tax equivalent yield?
To calculate, take the 'Annual rental income (Weekly rent x 52 weeks)' and divide by the 'Property value'. Then multiply this number by 100. Example: Property value $600,000 and expected rent $500 a week.
How do I calculate yield to maturity?
Yield to maturity (YTM) = [(Face value/Present value)1/Time period]-1. If the YTM is less than the bond's coupon rate, then the market value of the bond is greater than par value ( premium bond). If a bond's coupon rate is less than its YTM, then the bond is selling at a discount.
What is equivalent yield?
The equivalent yield is actually the discount rate that produces a present value equal to the capital value of the investment when applied to both the term and the reversion cash flows.