The adjusted closing price represents a stock’s closing price after accounting for corporate actions such as dividends, stock splits, and rights offerings. Unlike the raw closing price, it reflects the true economic value of a share over time by adjusting for these events, allowing for accurate performance comparisons across different periods.
Investors and analysts use adjusted closing prices to calculate total returns and evaluate historical price trends without distortions caused by corporate changes. In financial modeling and portfolio analysis, this metric ensures that performance metrics – like moving averages or returns – are based on a consistent and comparable price history.
