# Stock-Dividend Adjustment

> Convert Price and Quantity Bases Without Inventing Value

`D02-F02-A03` · Corporate Actions and Security Master Data → Complex Distributions · archetype `record-transform` · difficulty 3/5 · verification **verified**

Full page: https://docs.thefintechbuilder.com/corporate-actions-and-security-master-data/complex-distributions/stock-dividend-adjustment/
Agent skill: `npx skills add IslamBaraka90/Fintech-Algorithms-Library` — https://docs.thefintechbuilder.com/guides/agent-skill/

## Install and import

```bash
npm install fintech-algorithms
```

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

## Signature

```ts
calculate(data)
```

Applies a stock dividend, where shareholders receive additional shares instead of cash. Economically close to a split, but reported differently and often with a different volume convention — which is the part that gets missed.

## Parameters

| Name | Type | Required | Notes |
| --- | --- | --- | --- |
| `data` | `{ method: string; securityId: string; asOf: string; anchorAt: string; volumePolicy: string; events: Event[]; observations: Observation[] }` | yes | `volumePolicy` decides whether traded volume is restated alongside price; the two conventions are both in use and disagree. `anchorAt` fixes the basis date. Point-in-time by construction: `asOf` is the knowledge time, and only revisions available at or before it are eligible. Passing the event date instead of the knowledge date is what lets a backtest use information it could not have had. |

## Returns

`{ method, appliedEvents, unavailableEventIds, cancelledEventIds, observations, … }`

Adjusted observations plus which events were applied, which were not yet knowable, and which were cancelled — a cancelled event that silently still applies is a class of bug this makes visible.

## Errors

- When the volume policy or method is unrecognised — throws

## Complexity

Time `O(n + e)`, space `O(n)`.

## Worked example

This is the worked example published in the article, replayed by the test suite on every run. The output cannot drift.

### Input

`data`:

```json
{
  "method": "backward_post_event_same_class",
  "securityId": "SYNTH-CLASS-A",
  "asOf": "2026-02-04T12:00:00Z",
  "anchorAt": "2026-02-03T21:00:00Z",
  "volumePolicy": "adjust_to_anchor_basis",
  "events": [
    {
      "eventId": "SD-001",
      "subjectSecurityId": "SYNTH-CLASS-A",
      "distributedSecurityId": "SYNTH-CLASS-A",
      "exAt": "2026-01-15T14:30:00Z",
      "recordDate": "2026-01-15",
      "payableDate": "2026-01-20",
      "revisions": [
        {
          "publishedAt": "2026-01-05T18:00:00Z",
          "status": "confirmed",
          "rateNewSharesPerOld": 0.1,
          "sourceId": "SYNTH-NOTICE-1"
        }
      ]
    },
    {
      "eventId": "SD-002",
      "subjectSecurityId": "SYNTH-CLASS-A",
      "distributedSecurityId": "SYNTH-CLASS-A",
      "exAt": "2026-02-03T14:30:00Z",
      "recordDate": "2026-01-30",
      "payableDate": "2026-02-02",
      "revisions": [
        {
          "publishedAt": "2026-01-20T18:00:00Z",
          "status": "confirmed",
          "rateNewSharesPerOld": 0.15,
          "sourceId": "SYNTH-NOTICE-2-R1"
        },
        {
          "publishedAt": "2026-01-25T18:00:00Z",
          "status": "confirmed",
          "rateNewSharesPerOld": 0.2,
          "sourceId": "SYNTH-NOTICE-2-R2"
        }
      ]
    }
  ],
  "observations": [
    {
      "at": "2026-01-02T21:00:00Z",
      "availableAt": "2026-01-02T21:00:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "price": 50,
      "shares": 200,
      "volume": 80
    },
    {
      "at": "2026-02-02T21:00:00Z",
      "availableAt": "2026-02-02T21:00:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "price": 55,
      "shares": 220,
      "volume": 90
    },
    {
      "at": "2026-02-03T14:30:00Z",
      "availableAt": "2026-02-03T14:30:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "price": 46,
      "shares": 264,
      "volume": 100
    }
  ]
}
```

### Call

```ts
calculate(data)
```

### Returns

object with 9 fields: method, securityId, asOf, anchorAt, volumePolicy, appliedEvents, unavailableEventIds, cancelledEventIds, …

```json
{
  "method": "backward_post_event_same_class",
  "securityId": "SYNTH-CLASS-A",
  "asOf": "2026-02-04T12:00:00Z",
  "anchorAt": "2026-02-03T21:00:00Z",
  "volumePolicy": "adjust_to_anchor_basis",
  "appliedEvents": [
    {
      "eventId": "SD-001",
      "exAt": "2026-01-15T14:30:00Z",
      "revisionPublishedAt": "2026-01-05T18:00:00Z",
      "knownByExDate": true,
      "rateNewSharesPerOld": 0.1,
      "shareFactor": 1.1,
      "priceFactor": 0.909090909091,
      "sourceId": "SYNTH-NOTICE-1"
    },
    {
      "eventId": "SD-002",
      "exAt": "2026-02-03T14:30:00Z",
      "revisionPublishedAt": "2026-01-25T18:00:00Z",
      "knownByExDate": true,
      "rateNewSharesPerOld": 0.2,
      "shareFactor": 1.2,
      "priceFactor": 0.833333333333,
      "sourceId": "SYNTH-NOTICE-2-R2"
    }
  ],
  "unavailableEventIds": [],
  "cancelledEventIds": [],
  "rows": [
    {
      "at": "2026-01-02T21:00:00Z",
      "availableAt": "2026-01-02T21:00:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "rawPrice": 50,
      "adjustedPrice": 37.878787878788,
      "rawShares": 200,
      "adjustedShares": 264,
      "rawVolume": 80,
      "adjustedVolume": 105.6,
      "cumulativeShareFactor": 1.32,
      "appliedEventIds": ["SD-001", "SD-002"]
    },
    {
      "at": "2026-02-02T21:00:00Z",
      "availableAt": "2026-02-02T21:00:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "rawPrice": 55,
      "adjustedPrice": 45.833333333333,
      "rawShares": 220,
      "adjustedShares": 264,
      "rawVolume": 90,
      "adjustedVolume": 108,
      "cumulativeShareFactor": 1.2,
      "appliedEventIds": ["SD-002"]
    },
    {
      "at": "2026-02-03T14:30:00Z",
      "availableAt": "2026-02-03T14:30:05Z",
      "sourceId": "SYNTH-CLOSES-V1",
      "rawPrice": 46,
      "adjustedPrice": 46,
      "rawShares": 264,
      "adjustedShares": 264,
      "rawVolume": 100,
      "adjustedVolume": 100,
      "cumulativeShareFactor": 1,
      "appliedEventIds": []
    }
  ]
}
```

## Other exports

`settleEntitlement`, `roundOutput`. Every module additionally exports `run` as an alias of its primary
function, and a `meta` object carrying its catalog id, domain, family, shape and article URL.

## Verification and provenance

Tier: **verified** (via input-expected).

The worked example below is the figure published in this algorithm's article, replayed and asserted by the test suite on every build. The arithmetic cannot drift without the build failing.

Both tiers guarantee the signature. Full explanation: https://docs.thefintechbuilder.com/guides/verification/

Generated from the docs.json payload shipped inside fintech-algorithms@0.13.1.
The signature and parameter list are checked against the compiled implementation at build time,
so a description that contradicts the code fails the build rather than reaching this file.

## Links

- Article (how it works, step by step): https://thefintechbuilder.com/corporate-actions-and-security-master-data/complex-distributions/stock-dividend-adjustment/
- Implementation source: https://github.com/IslamBaraka90/Fintech-Algorithms-Library/blob/main/src/corporate-actions-and-security-master-data/complex-distributions/stock-dividend-adjustment/impl.ts
- Standalone repository: https://github.com/IslamBaraka90/Fintech-Stock-Dividend-Adjustment-Corporate-Actions-algorithm
- Package on npm: https://www.npmjs.com/package/fintech-algorithms
- Domain index for agents: https://docs.thefintechbuilder.com/corporate-actions-and-security-master-data/llms.txt