So I have been able to figure out my split adjusted cost, and wanted to know if split adjustment also affects dividend payout of the stock (i.e. if it has a 2:1 split adj factor, I should divide the dividend in the historical price chart by 2)
Thanks.
Yes you do but why? (If you reinvested dividends then I understand your query, but if you took the dividends in cash, then why does it matter?
The dividends were reinvested. I'm trying to find the cost basis for a stock that is a non-covered security (purchased in the 80s before that information was provided)
Who owned the stock when it was sold last year? You or your parents / the cost basis is a different calculation if not your parents
They did. But I'm doing their taxes for them.
Specificially, I'm looking at a time frame where the Stock Split Adjustment was 4:1 (it split twice over the the years).
Given this, should I be multiplying the dividend amount by 4? Or dividing it by 4?
The dollar value of the dividend does not change - it is fixed
Number of shares * share price = dollar value of dividend reinvestment
Since the number of shares is now 4x and the dollar value can not change, share price is divided by 4
Careful though, if there were dividend reinvestments after the first stock split , then multiply shares by 2 and divide share price by 2
Make sense?