Special-Dividend Adjustment

Preserve Return Meaning Across the Ex-Date

Install and import

bash

npm install fintech-algorithms

import { calculate } from "fintech-algorithms/corporate-actions-and-security-master-data/complex-distributions/special-dividend-adjustment";

Signature

calculate(rawData)

Worked example

executed Captured by running this function on the input its own test provides. Real output of real code — but not asserted against a published figure.

Input

rawData

{
  "securityId": "SYNTHETIC-SECURITY-004",
  "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
  "asOf": "2026-03-16T20:10:00Z",
  "methodology": {
    "id": "SYNTHETIC-NET-RETURN-POLICY",
    "version": "1.0",
    "sourceId": "SYNTHETIC-METHODOLOGY-NOTE",
    "classificationMode": "source-designated",
    "priceAdjustmentCashBasis": "net",
    "referenceAnchor": "previous-session-official-close",
    "outputDecimals": 8
  },
  "eventRevisions": [
    {
      "revisionId": "R1",
      "securityId": "SYNTHETIC-SECURITY-004",
      "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
      "status": "announced",
      "issuerClassification": "special",
      "grossAmount": 15,
      "currency": "EUR",
      "announcedAt": "2026-02-02T12:00:00Z",
      "availableAt": "2026-02-02T12:05:00Z",
      "exAt": "2026-03-16T13:30:00Z",
      "paymentAt": "2026-03-20T12:00:00Z",
      "actionOrder": 20,
      "amountBasisOrder": 0,
      "sourceId": "SYNTHETIC-ISSUER-NOTICE-R1"
    },
    {
      "revisionId": "R2",
      "securityId": "SYNTHETIC-SECURITY-004",
      "eventId": "SYNTHETIC-SPECIAL-DIVIDEND-2026-01",
      "status": "announced",
      "issuerClassification": "special",
      "grossAmount": 16,
      "currency": "EUR",
      "announcedAt": "2026-02-05T14:00:00Z",
      "availableAt": "2026-02-05T14:10:00Z",
      "exAt": "2026-03-16T13:30:00Z",
      "paymentAt": "2026-03-20T12:00:00Z",
      "actionOrder": 20,
      "amountBasisOrder": 0,
      "sourceId": "SYNTHETIC-ISSUER-NOTICE-R2"
    }
  ],
  "referencePrice": {
    "value": 100,
    "currency": "USD",
    "anchorType": "previous-session-official-close",
    "anchorAt": "2026-03-13T20:00:00Z",
    "observedAt": "2026-03-13T20:00:00Z",
    "availableAt": "2026-03-13T20:00:05Z",
    "sourceId": "SYNTHETIC-OFFICIAL-CLOSE"
  },
  "precedingActions": [
    {
      "actionId": "SYNTHETIC-2-FOR-1-SPLIT",
      "actionOrder": 10,
      "priceFactor": 0.5,
      "perShareAmountFactor": 0.5,
      "effectiveAt": "2026-03-16T13:30:00Z",
      "observedAt": "2026-02-01T10:00:00Z",
      "availableAt": "2026-02-01T10:05:00Z",
      "sourceId": "SYNTHETIC-ACTION-SOURCE"
    }
  ],
  "fxRate": {
    "baseCurrency": "EUR",
    "quoteCurrency": "USD",
    "rate": 1.1,
    "observedAt": "2026-03-13T20:00:00Z",
    "availableAt": "2026-03-13T20:00:05Z",
    "sourceId": "SYNTHETIC-FX-CLOSE"
  },
  "taxProfile": {
    "withholdingRate": 0.25,
    "jurisdiction": "SYNTHETIC-JURISDICTION",
    "investorCategory": "SYNTHETIC-NONRESIDENT",
    "observedAt": "2026-01-05T09:00:00Z",
    "availableAt": "2026-01-05T09:05:00Z",
    "sourceId": "SYNTHETIC-TAX-RULE"
  },
  "exPriceObservation": {
    "value": 43.75,
    "currency": "USD",
    "observedAt": "2026-03-16T20:00:00Z",
    "availableAt": "2026-03-16T20:00:05Z",
    "sourceId": "SYNTHETIC-EX-CLOSE"
  }
}

Call

calculate(rawData)

Returns

object with 16 fields: eventState, selectedRevisionId, classificationDecision, classificationReason, adjustmentApplied, referencePriceOnEventBasis, grossDividendOnEventBasis, netDividendOnEventBasis, …

{
  "eventState": "effective",
  "selectedRevisionId": "R2",
  "classificationDecision": "special",
  "classificationReason": "source designation: special",
  "adjustmentApplied": true,
  "referencePriceOnEventBasis": 50,
  "grossDividendOnEventBasis": 8.8,
  "netDividendOnEventBasis": 6.6,
  "adjustmentCashAmount": 6.6,
  "theoreticalExPrice": 43.4,
  "adjustmentFactor": 0.868,
  "grossDistributionYield": 0.176,
  "methodologyId": "SYNTHETIC-NET-RETURN-POLICY",
  "methodologyVersion": "1.0"
}

Showing 14 of 16 fields.

Diagrams

Special-Dividend Adjustment — article hero

Special-Dividend Adjustment — failure guard

Special-Dividend Adjustment — worked example

Calculation flow

Evidence-to-adjustment calculation flow

flowchart LR
    A["Versioned event evidence"] --> B["Select latest available revision"]
    B --> C{"Cancelled?"}
    C -->|Yes| X["Stop with diagnostic"]
    C -->|No| D["Validate ex-date and official-close anchor"]
    D --> E["Apply preceding same-day action bases"]
    E --> F["Convert FX and gross or net cash"]
    F --> G{"Named policy says special?"}
    G -->|No| H["Factor 1; ordinary treatment"]
    G -->|Yes| I["Subtract cash and reject nonpositive result"]
    I --> J["Factor, returns, and lineage"]
    H --> J

Point-in-time revision lifecycle

stateDiagram-v2
    [*] --> Announced
    Announced --> Revised: later version becomes available
    Announced --> Cancelled: cancellation becomes latest
    Revised --> Revised: another version becomes available
    Revised --> Cancelled: cancellation becomes latest
    Announced --> Effective: asOf reaches exAt
    Revised --> Effective: asOf reaches exAt
    Effective --> Corrected: post-event revision is processed by policy
    Cancelled --> [*]
    Corrected --> [*]

How it works

This page states the contract — how to call it correctly. The article explains the concept: why it works, and where it breaks.

Read the article →

References

R1 - S&P Dow Jones Indices Equity Indices Policies & Practices
R2 - FTSE Russell Corporate Actions and Events Guide for Market Capitalisation Weighted Indices
R3 - FINRA Rule 11140, Transactions in Securities "Ex-Dividend," "Ex-Rights" or "Ex-Warrants"
R4 - Costco Wholesale Corporation declares special cash dividend of $10 per share