1. What is Average Price Per Share?

The average price per share represents the mean cost basis for shares of a stock or other security. It's calculated by dividing the total amount invested by the number of shares purchased.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Total Cost — The sum of all money invested in purchasing the shares (in currency)
• Shares Purchased — The total number of shares acquired (integer)

Explanation: This calculation helps investors understand their cost basis when purchasing shares at different prices over time.

3. Importance of Average Price Calculation

Details: Knowing your average price per share is crucial for determining your break-even point, calculating potential profits or losses, and making informed decisions about when to sell.

4. Using the Calculator

Tips: Enter the total amount spent on purchasing shares (including any fees if applicable) and the total number of shares acquired. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Should I include trading fees in total cost?
A: Yes, for accurate average price calculation, include all costs associated with purchasing the shares.

Q2: How does this differ from dollar-cost averaging?
A: Dollar-cost averaging is a strategy of investing fixed amounts at regular intervals, while average price is simply the mathematical result of your purchases.

Q3: What if I bought shares at different prices?
A: This calculator works perfectly for multiple purchases - just sum all amounts spent and all shares purchased across transactions.

Q4: Why is average price important?
A: It helps you evaluate your investment performance by comparing to current market price, and is essential for tax calculations when selling.

Q5: Can I use this for fractional shares?
A: Yes, the calculator accepts decimal values for shares if you've purchased fractional shares.