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Sagot :
Fund XYZ had a pretax return of 10. 2 percent and a tax-adjusted return of 9. 5 percent
Fund XYZ's tax cost ratio:
Tax Cost Ratio = [1 {(1 + 0.095)/(1 + 0.102)}](100) = [1 0.99365](100) = 0.635
The return on an investment that excludes the taxes that the investor must pay on this return is known as the pretax return. The pretax rate of return is the metric most frequently used for investments in the financial industry because tax conditions vary by individual and different investments are taxed at different rates.
In contrast to the after-tax rate of return, the pretax rate of return does not account for capital gains or dividend taxes. An after-tax return can be compared to the pretax return.
To know more about pretax return
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