1. What is Average Cost Per Share?

The Average Cost Per Share is a calculation that shows the average price you've paid for each share of a particular investment. It's calculated by dividing the total amount invested by the number of shares owned.

2. How Does the Calculator Work?

The calculator uses the simple formula:

Where:

• Total Cost — The sum of all money invested in the shares (in USD)
• Number of Shares — The total quantity of shares purchased

Explanation: This calculation helps investors understand their cost basis for tax purposes and to evaluate investment performance.

3. Importance of Average Cost Calculation

Details: Knowing your average cost per share is essential for determining when to sell investments for tax efficiency, comparing against current market prices, and tracking investment performance over time.

4. Using the Calculator

Tips: Enter the total amount you've invested in USD and the total number of shares you own. Both values must be positive numbers.

5. Frequently Asked Questions (FAQ)

Q1: Does this include brokerage fees?
A: For most accurate results, your total cost should include all fees and commissions paid to acquire the shares.

Q2: How does this differ from FIFO or LIFO cost basis?
A: Average cost is simpler than first-in-first-out (FIFO) or last-in-first-out (LIFO) methods and is commonly used for mutual funds and dividend reinvestment plans.

Q3: What if I bought shares at different prices?
A: This calculator automatically accounts for multiple purchases at different prices by using the total cost and total shares.

Q4: Can I use this for cryptocurrency?
A: Yes, the same calculation works for any asset purchased in discrete units (coins, tokens, shares, etc.).

Q5: How often should I calculate my average cost?
A: Recalculate whenever you make additional purchases to maintain an accurate cost basis for your entire position.