Saturday, June 18, 2011 11:02:36 AM
What Does Split Adjusted Mean?
A modification made to a security's price that takes into consideration the effect of a split on the total number of shares or units outstanding, in order to compare the security's current price to its historical price in a consistent form of valuation. In order to adjust a security's price, the post split price would be multiplied by the split ratio (or ratios if multiple splits had occurred) in order to get a split-adjusted price.
Investopedia explains Split Adjusted
If you own a stock that undergoes a stock split, it's imperative that you use the split-adjusted prices when calculating your return.
Consider a fictional company that traded for $20 a share in 1990. It has since undergone three 2-for-1 splits and now trades at $30. Although it may seem that the stock price has gone up 50%, it has actually appreciated by much more than that. One 1990 share would now be worth $240 because the original share is equivalent to eight current shares, each worth $30. This means that the stock has appreciated approximately 12 times. The 1990 split-adjusted share price would be $2.50 (20/8).
**This explanation is in no way meant to be insulting but intended for clarification and for anyone's use.
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