Why it's useful Knowing the weighted average price you paid for each share of stock can help you determine how your investment is performing as a whole, relative to the current share price.

Divide the total weighted earnings by the weighted years to find the weighted-average five-year net income. Following the example, divide $1,810,000 by 15, which equals $120,667.

To calculate a price-weighted average, or any arithmetic average for that matter, add the numbers (stock prices) together and divide by the number of stocks in the average.

However, averages are also calculable from percentages. As an example, grades in a course might be weighted differently between tests. If that's the case, a simple average would bias the result.

A price-weighted average is a simple mathematical average of several stock prices, and is often used to construct a price-weighted index. Perhaps the.

Here are the steps to calculate a weighted average trade price: List the various prices at which you bought the stock, along with the number of shares you acquired in each transaction.

How to calculate your weighted average price per share When it comes to buying stock, a weighted average price can be used when shares of the same stock are acquired in multiple transactions over ...