Municipal Bonds: Tax-Equivalent Yield, Credit & Call Risk
Tax-equivalent yield with federal and state rates, the break-even tax bracket, yield to maturity, yield to call and yield to worst with RATE, GO vs revenue bond coverage, credit spreads by rating, the de minimis rule and an after-tax muni vs corporate vs Treasury chart, every cell checked live. Fictional issuers, illustrative tax rates, educational only, not investment or tax advice.
The first lesson is free — no account needed.
About this course
A municipal bond course on the numbers behind US munis, built on fictional issuers and one fictional investor, for investors, advisors in training and finance students. You turn a tax-exempt yield into a tax-equivalent yield with the federal rate and with federal plus state tax, find the break-even tax rate at which a muni beats a taxable bond, price a callable premium muni to maturity and to its first call with RATE and take the yield to worst over the call schedule, compare a water authority's debt service coverage with a city's general obligation debt, measure credit spreads over the AAA curve by rating, classify bonds under a simplified de minimis rule and chart the after-tax yields of a muni, a corporate bond and a Treasury. Tax rates are illustrative. Educational only, not investment or tax advice. The first lab is free.
Lessons
- Tax-Equivalent Yield: Federal Only and Federal + StateFree
- Break-Even Tax Bracket: When Does the Muni Win? Pro
- Yield to Maturity & Yield to Call with RATE Pro
- Yield to Worst: the Lowest Yield over the Call Schedule Pro
- GO vs Revenue Bonds: Debt Service Coverage from Pledged Revenues Pro
- Credit Spreads vs Ratings: Spread to the AAA Curve Pro
- Premium & Discount Munis: the De Minimis Rule (Simplified) Pro
- Muni vs Corporate vs Treasury after Tax (Chart) Pro