How does Yahoo finance adjust stock data for splits and dividends?
For stock splits, let's say stock XYZ closed at 100 on February 5.  Then on February 6, it undergoes a 2-for-1 split and closes the day at 51.  In Yahoo's historical prices for XYZ, you will see that it closed at 51 on Feb 6, but all of the closing prices for the previous days will be divided by 2.  So for Feb 5, it will say the closing price was 50 instead of 100. For dividends, let's say stock ABC closed at 200 on December 18.  Then on December 19, the stock increases in price by $2 but it pays out a $1 dividend.  In Yahoo's historical prices for XYZ, you will see that it closed at 200 on Dec 18 and 201 on Dec 19.  Yahoo adjusts the closing price for Dec 19 to factor in the dividend. Should be noted that pacoverflow's answer is wrong. Yahoo back-adjusts all the previous (not current or future) values based on a cumulative adjustment factor. So if there's a dividend ex-date on December 19, Yahoo adjusts all the PREVIOUS (December 18 and prior) prices with a factor which is: 1 - dividend / Dec18Close "Yahoo's ""Adj Close"" data is adjusted for splits, but not for dividends. Despite Yahoo's webpage's footnote saying  *Close price adjusted for dividends and splits. we can see empirically that the ""Adj Close"" is only adjusted for splits. For example, consider Siemens from Jan 27, 2017 to Mar 15, 2017: The Adj Close adjusts for splits: On any particular day, the ""Adj Close"" is equal to the ""Close"" price divided by the cumulative product of all splits that occurred after that day. If there have been no splits after that day, then the ""Adj Close"" equals the ""Close"" price. Since there is a 2-for-1 split on Mar 14, 2017, the Adj Close is half the Close price for all dates from Jan 27, 2017 to Mar 13, 2017. Note that if Siemens were to split again at some time in the future, the Adj Close prices will be readjusted for this future split. For example, if Siemens were to split 3-for-1 tomorrow, then all the Adj Close prices seen above will be divided by 3. The Adj Close is thus showing the price that a share would have traded on that day if the shares had already been split in accordance with all splits up to today. The Adj Close does not adjust for dividends: Notice that Siemens distributed a $1.87 dividend on Feb 02, 2017 and ~$3.74 dividend on Jan 30, 2017. If the Adj Close value were adjusted for these dividends then we should expect the Adj Close should no longer be exactly half of the Close amount. But we can see that there is no such adjustment -- the Adj Close remains (up to rounding) exactly half the Close amount: Note that in theory, the market reacts to the distribution of dividends by reducing the trading price of shares post-dividend. This in turn is reflected in the raw closing price. So in that sense the Adj Close is also automatically adjusted for dividends. But there is no formula for this. The effect is already baked in through the market's closing prices."
A stock dividend isn't exactly a split. Example: You have 100 shares of stock worth $5 a share (total value $500). The company wants to distribute a dividend worth 1%. You could expect a check for $5. But If they wanted to do a stock dividend they could send you 0.01 shares for every share you own, in your case you will be given a single share worth $5. Now you own 101 shares. Why a share dividend? It doesn't take cash to give the dividend. It keeps the money invested in the company. Some investors re-invest a cash dividend, some don't.  A cash dividend is generally taxable income for the investor; a stock dividend isn't. Some investors prefer one over the other, but it depends on their specific financial picture. Neither a stock dividend, a cash dividend or split changes anything.  The split changes the price to meet a goal. The cash dividend lowers the price by sending excess cash to the investors. The stock dividend lowers the price by creating new shares and retaining cash.  It company picks the message and the method. depending on their goals and situation. Remember that a company may want to give a dividend because they have a history of doing so, but not have the cash to do so. It is like a split because the number of shares you own will go up, and the price per share will go down. But a split is generally done to bring the price of a share to within a specific range. The company sees a benefit to having a stock mid priced, instead of very high or very low. It's got to be a bad chunk of data on Google.  Yahoo finance does not show that anomaly for 1988, nor does the chart from Home Depot's investor relations site: Adjustments can be for splits as well as for dividends.  From Investopedia.com: Historical prices stored on some public websites, such as Yahoo!   Finance, also adjust the past prices of the stock downward by the   dividend amount. Thus, that could also be a possible factor in looking at the old prices. "There are several reasons to pay for data instead of using Yahoo Finance, although these reasons don't necessarily apply to you if you're only planning to use the data for personal use.  Yahoo will throttle you if you attempt to download too much data in a short time period. You can opt to use the Yahoo Query Language (YQL), which does provide another interface to their financial data apart from simply downloading the CSV files. Although the rate limit is higher for YQL, you may still run into it. An API that a paid data provider exposes will likely have higher thresholds.  Although the reliability varies throughout the site, Yahoo Finance isn't considered the most reliable of sources. You can't beat free, of course, but at least for research purposes, the Center for Research in Security Prices (CRSP) at UChicago and Wharton is considered the gold standard. On the commercial side, data providers like eSignal, Bloomberg, Reuters also enjoy widespread popularity. Although both the output from YQL and Yahoo's current CSV output are fairly standard, they won't necessarily remain that way. A commercial API is basically a contract with the data provider that they won't change the format without significant prior notice, but it's reasonable to assume that if Yahoo wanted to, they could make minor changes to the format and break many commercial applications. A change in Yahoo's format would likely break many sites or applications too, but their terms of use do state that Yahoo ""may change, suspend, or discontinue any aspect of the Yahoo! Finance Modules at any time, including the availability of any Yahoo! Finance Modules. Yahoo! may also impose limits on certain features and services or restrict your access to parts or all of the Yahoo! Finance Modules or the Yahoo! Web site without notice or liability."" If you're designing a commercial application, a paid provider will probably provide technical support for their API.  According to Yahoo Finance's license terms, you can't use the data in a commercial application unless you specifically use their ""badges"" (whatever those are). See here. In this post, a Yahoo employee states: The Finance TOS is fairly specific. Redistribution of data is only   allowed if you are using the badges the team has created. Otherwise, you can use YQL or whatever method to obtain data for   personal use. The license itself states that you may not: sell, lease, or sublicense the Yahoo! Finance Modules or access   thereto or derive income from the use or provision of the Yahoo!   Finance Modules, whether for direct commercial or monetary gain or   otherwise, without Yahoo!'s prior, express, written permission In short, for personal use, Yahoo Finance is more than adequate. For research or commercial purposes, a data provider is a better option. Furthermore, many commercial applications require more data than Yahoo provides, e.g. tick-by-tick data for equities, derivatives, futures, data on mergers, etc., which a paid data source will likely provide. Yahoo is also known for inaccuracies in its financial statements; I can't find any examples at the moment, but I had a professor who enjoyed pointing out flaws in the 10K's that he had come across. I've always assumed this is because the data were manually entered, although I would assume EDGAR has some method for automatic retrieval. If you want data that are guaranteed to be accurate, or at least have a support contract associated with them so you know who to bother if it isn't, you'll need to pay for it." Simply put, 100% stock dividend is 1:1 or 1 for 1 bonus share, as explained above, if you held 100 shares after 1:1 bonus you would have 200 shares (100 original, another 100 as bonus). The impact on the stock price is that the price becomes 1/2 the price of the stock before bonus (supply has doubled). 1:1 bonus is nor exactly like a 2:1 / 2 for 1 stock split, in a split the face value if the share would also go down. In effect, any bonus share is not of any fundamental value to the shareholder, as the companies usually capitalize reserves from previous year/years this way as the value of the company does not change fundamentally. In effect the company is taking your money and giving you shares instead. The ex-dividend date, prevents this, but people are still able to do this and this is an investment strategy. There are some illiquid and immature markets where prices don't adjust.  In the options market people are able to find mispriced deep in the money calls to take advantage of the ex-dividend date. It is called dividend capture using covered calls. Returns reported by mutual funds to shareholders, google, etc. are computed after all the funds' costs, including Therefore the returns you see on google finance are the returns you would actually have gotten. Tell your broker.  You can usually opt to have certain positions be FIFO and others LIFO.  Definitely possible with Interactive Brokers.