Asked by Aliyana Shivji on Apr 27, 2024
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An investor accumulated 1800 shares of Microtel Corporation over a period of several months. She bought 1,000 shares at $15.63, 500 shares at $19.00, and 300 shares at $21.75. What was her average cost per share? (Note: Investors who purchase shares in the same company at more than one price must eventually do this calculation. Tax rules require that the capital gain or loss on the sale of any of the shares be calculated using the weighted-average price paid for all of the shares rather than the particular price paid for the shares actually sold.)
Average Cost
The total cost divided by the number of goods or services produced or acquired.
Shares
Ownership stakes in a company or financial asset that are divided equally among shareholders, allowing them to receive proportional shares of any declared profits through dividends.
- Compute the average expenditures and calculate weighted averages in finance-related transactions.
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Learning Objectives
- Compute the average expenditures and calculate weighted averages in finance-related transactions.
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