What is the "after-tax rate of return"?

September 30, 2008

Date:   14 Aug 2007
From:   Steve

What is the "after-tax rate of return"? Is there a formula to compute it?

Answer

Date:   05 Sep 2007

Hello Steve,

The "after-tax rate of return" is the rate of return after income taxes are paid.

A rough formula would be (r – t)/(y X i) or the return (income from the investment) – taxes paid with respect to the return divided by the years or period of investment and the amount of the initial investment.

Good luck!
Mike Gray

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