Average Price Per Share

Average price per share - An average price per share is a method of determining the taxes that have to be paid on mutual fund redemptions (the return on the principal) or prior to maturity. The simplest explanation for computing the average price per share is to divide the cost of acquiring the shares by the total amount of shares acquired. Computing the average cost per share can appear complicated if the investor has purchased different quantities of shares at varying prices, for example 300 shares at 10.00 a share and 450 shares at 25.00 a share. However, by adding up all the prices and then dividing by all the shares it is much easier. The average price per share will also determine the break-even point for the investor.