A method for comparing returns on taxable corporate bonds and tax-free municipal bonds to determine the higher after-tax return. This helps investors make more informed choices considering their tax brackets.
A bond premium refers to the amount the purchaser pays in buying a bond that exceeds the face or call value of the bond. This premium can be amortized, reflecting the true interest rate being less than the coupon rate.
Taxable bonds issued by municipalities and designed to encourage spending on infrastructure and create jobs. The issuance of these bonds was authorized by the American Recovery and Reinvestment Act of 2009, and the program ended on December 31, 2009.
