The adjusted data on Yahoo Finance follows the Center for Research in Security Prices (CRSP) standards.
Here's an example from their article for calculating the split and dividend multipliers.
Split multipliers are determined by the split ratio.
Dividend multipliers are calculated based on dividend as a percentage of the price, primarily to avoid negative historical pricing.
Here's how split and dividend multipliers are calculated and applied to determine adjusted close prices.
The first table shows historical prices and the dates of a split and a dividend. The second table shows the calculations.
The multipliers we'll use are derived from the split and dividend:
Using these split and dividend multipliers, adjusted close prices are calculated for dates prior to the split and prior to the dividend ex-date.
|Date||Close, Dividend, or Split|
|2/16||Close = 46.99|
|2/17||Close = 48.30|
|2/18||Split = 2:1
Close = 24.96
|2/19||Close = 24.91|
|2/20||Close = 24.95|
|2/21||Dividend = 0.08 (ex-date)
Close = 24.53
|2/22||Close = 24.54|
|Date||Adjusted close calculation|
|2/16||0.5 * 0.9968 * 46.99 = 23.42|
|2/17||0.5 * 0.9968 * 48.30 = 24.07|
|2/18||0.9968 * 24.96 = 24.88|
|2/19||0.9968 * 24.91 = 24.83|
|2/20||0.9968 * 24.95 = 24.87|