Financial Term Explorer
Dividend Adjustment
The stock price drop on ex-dividend date by approximately the dividend amount. Important for chart analysis.
📝 Definition
**Dividend Adjustment** is the stock price decrease on ex-dividend date corresponding to the dividend amount. Theoretically, a $1 dividend causes a $1 price drop. Important for technical analysis.
In Simple Terms
Like detaching a $100 coupon from a product - the product price drops by $100. Receiving dividend means price adjusts down.
Example
A $100 stock going ex-dividend at $2 should theoretically open at $98.
💡 Practical Tips
- 1Use 'adjusted charts' that account for dividend gaps in technical analysis.
- 2Ex-date price drops aren't losses - you received that value as dividends.
⚠️ Common Mistakes
Don't think you 'lost money' on ex-dividend day price drops.
❓ Frequently Asked Questions
What is adjusted price?▼
Stock price modified for dividends and splits. Used for long-term chart analysis.