With this weighted average, we can now calculate a different and more accurate EPS of $0.80 per share. Bear in mind that this is a simplified example, and a company's number of outstanding shares ...

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.

To understand how it can do all these things, we need to know how to calculate a weighted average. So let's start with the nuts and bolts of the calculation and how you can use this metric in your ...

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.

Weighted average is a powerful tool for an investor. It can be used to evaluate the performance of a portfolio. It can help us better understand how.

By calculating a company's weighted average number of outstanding shares, we can get a more accurate picture of its earnings.