The yield on a taxable bond issue after federal income taxes are paid is called the after-tax yield:after-tax yield = pretax yield × (1 – marginal tax rate)Alternatively, we can determine the yield that must be offered on a taxable bond issue to give the same after-tax yield as a tax-exempt issue.This yield is called the equivalent taxable yield and is:equivalent taxable yield =tax-exempt yield / (1 – marginal tax rate)