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I hope my queries makes sense as I am pretty new to business finance (not sure if it's appropriate to post here). To be honest, this query is related to the assignment from my school which I need to submit.

Our assignment requires to look into Rio Tindo data link here: https://finance.yahoo.com/quote/RIO/history?period1=1541203200&period2=1572739200&interval=1mo&filter=history&frequency=1mo&includeAdjustedClose=true

The question requires us to draw graphs for RIO’s adjusted share price and return (you can use daily, monthly or quarterly return). Some queries here:

  1. what does adjusted share price means? Based on my googling, I saw A LOT of "adjusted stock price". I bet both are different?

  2. If I'm correct, to get the "returns" of the adjusted share price, I need to use the following formula based on the link below:

(If using month, e.g. Jan and Feb 2018, the formula is:[(Feb 2018/Jan 2018)-1] * 100) However, there are some dividends in some months, will the dividend be affecting the calculation? If yes, how so (do I change the formula)?

https://finance.zacks.com/stock-return-using-adjusted-closing-price-11628.html#:~:text=The%20formula%20for%20percentage%20return,from%20decimal%20to%20percentage%20format.

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    $\begingroup$ Your link says"**Adjusted close price adjusted for both dividends and splits." If you change the frequency to Daily, you can see that the close price falls immediately after a dividend but the adjusted close price changes by a much smaller amount. So when using the adjusted close prices you do not have to make a further adjustment for dividends $\endgroup$
    – Henry
    Nov 3 '20 at 12:32

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