What is adjusted closing price?

Adjusted closing price is the closing price adjusted for corporate actions such as dividend payouts, stock splits, or the issuance of more shares. Adjusted closing price provides a more accurate snapshot of a stock’s value than the closing price because it accounts for factors such as dividend payouts, stock splits, and issuance of new shares.

How do events affect the adjusted closing price of a stock?

The easiest way to understand the adjustment is through examples so let’s see how each event impacts the Adjusted Closing Price of the stock. Let’s say that a stock is trading at ₹100 and the company declares a dividend of ₹10. The Adjusted Closing Price following this announcement will be ₹90 as the dividend reward gets factored into the price.

What is a closing price & why is it important?

That closing price is the reference point used by investors to compare a stock's performance over a period of time. The closing price of a stock is the key point of reference for tracking its price over time. However, the closing price will not reflect the impact of cash dividends, stock dividends, or stock splits.

What is the adjusted closing price for XYZ Corp?

The adjusted closing price is used when tracking or analyzing historical returns. For example, let's assume that the closing price for one share of XYZ Corp. is $20 on Thursday. After the close on Thursday, XYZ Corp. announces a dividend distribution of $1.50 per share. The adjusted closing price for the stock would then be $18.50 ($20-$1.50).