I'm looking into modelling monthly stock prices and want to start off by using data from Yahoo Finance.
I know that the closing prices given there are adjusted for stock splits and dividends, but I'd like to use the given raw data and adjust it myself.
For modelling purposes, should I adjust the past prices for dividends? I've researched this and read mixed opinions expressed.
My thought process was that suppose XYZ closes at 100 before a dividend of 0.05 is implemented. On the next day, the stock should ideally open at 99.95 and automatically account for the dividend given out.
Is this right or am I really wrong? Sorry if this is a noob question.