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Corporate taxable equivalent

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Definition of Corporate taxable equivalent

Corporate Taxable Equivalent Image 1

Corporate taxable equivalent

Rate of return required on a par bond to produce the same after-tax yield to
maturity that the premium or discount bond quoted would.



Related Terms:

Blue Ribbon Committee on Improving the Effectiveness of Corporate Audit Committees

A committee formed in response to SEC chairman Arthur Levitt's initiative to improve the financial
reporting environment in the United States. In a report dated February 1999, the committee
made recommendations for new rules for regulation of financial reporting in the United States that
either duplicated or carried forward the recommendations of the Treadway Commission.


Bond-equivalent basis

The method used for computing the bond-equivalent yield.


Bond equivalent yield

Bond yield calculated on an annual percentage rate method. Differs from annual
effective yield.


Bond-equivalent yield

The annualized yield to maturity computed by doubling the semiannual yield.


Bond Equivalent Yield

Bond yield calculated on an annual percentage rate method



CASH AND CASH EQUIVALENTS

The balance in a company’s checking account(s) plus short-term or temporary investments (sometimes called “marketable securities”), which are highly liquid.


Cash and equivalents

The value of assets that can be converted into cash immediately, as reported by a
company. Usually includes bank accounts and marketable securities, such as government bonds and Banker's
Acceptances. Cash equivalents on balance sheets include securities (e.g., notes) that mature within 90 days.


Corporate Taxable Equivalent Image 2

Cash equivalent

A short-term security that is sufficiently liquid that it may be considered the financial
equivalent of cash.


Cash-equivalent items

Temporary investments of currently excess cash in short-term, high-quality
investment media such as treasury bills and Banker's Acceptances.


Cash Equivalents

Highly liquid, fixed-income investments with original maturities of three months or less.


Cash Equivalents

Instruments or investments of such high liquidity and safety that they are virtually equal to cash.


Certainty equivalent

An amount that would be accepted in lieu of a chance at a possible higher, but
uncertain, amount.


Common stock equivalent

A convertible security that is traded like an equity issue because the optioned
common stock is trading high.


Corporate acquisition

The acquisition of one firm by anther firm.


Corporate bonds

Debt obligations issued by corporations.


Corporate charter

A legal document creating a corporation.


Corporate Taxable Equivalent Image 3

Corporate finance

One of the three areas of the discipline of finance. It deals with the operation of the firm
(both the investment decision and the financing decision) from that firm's point of view.


Corporate financial management

The application of financial principals within a corporation to create and
maintain value through decision making and proper resource management.



Corporate financial planning

Financial planning conducted by a firm that encompasses preparation of both
long- and short-term financial plans.


Corporate processing float

The time that elapses between receipt of payment from a customer and the
depositing of the customer's check in the firm's bank account; the time required to process customer
payments.


Corporate tax view

The argument that double (corporate and individual) taxation of equity returns makes
debt a cheaper financing method.


Coupon equivalent yield

True interest cost expressed on the basis of a 365-day year.


Equivalent annual annuity

The equivalent amount per year for some number of years that has a present
value equal to a given amount.


Equivalent annual benefit

The equivalent annual annuity for the net present value of an investment project.


Equivalent annual cash flow

Annuity with the same net present value as the company's proposed investment.


Equivalent annual cost

The equivalent cost per year of owning an asset over its entire life.


equivalent annual cost

The cost per period with the same present value as the cost of buying and operating a machine.


Equivalent bond yield

Annual yield on a short-term, non-interest bearing security calculated so as to be
comparable to yields quoted on coupon securities.



Equivalent loan

Given the after-tax stream associated with a lease, the maximum amount of conventional
debt that the same period-by-period after-tax debt service stream is capable of supporting.


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.


equivalent units of production (EUP)

an approximation of the number of whole units of output that could have been
produced during a period from the actual effort expended
during that period; used in process costing systems to assign
costs to production


Fixed-income equivalent

Also called a busted convertible, a convertible security that is trading like a straight
security because the optioned common stock is trading low.


Roth IRA. An IRA account whose earnings are not taxable at all under certain

circumstances.


Taxable acquisition

A merger or consolidation that is not a tax-fee acquisition. The selling shareholders are
treated as having sold their shares.


Taxable income

Gross income less a set of deductions.


Taxable Income

Income subject to income tax as reported on the tax return.


Taxable transaction

Any transaction that is not tax-free to the parties involved, such as a taxable acquisition.



 

 

 

 

 

 

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