Closing price and corporate actions
Corporate actions are actions taken by a company after trading hours, such as stock splits or dividend payments, that require its stock’s closing price to be adjusted.
Adjusted closing price
The adjusted closing price represents the accurate closing price based on corporate actions. For example, if the closing price of company ABC’s stock was £21.90, but it made dividend payments of 100p per share, the closing price will be adjusted to £20.90.
Similarly, if company ABC undergoes a five-for-one stock split after the markets close, the share price will be divided by five. If it was trading at £21.90, its new price would be 438p. Although the share price has changed, the fundamentals of the business – such as its market capitalisation – will not change, as the number of shares increase.