Cost Per Share (CPS): Calculation & Importance for Investors

Calculating cost per share.

Cost per share shows an investor how much money he paid on a per share basis for an investment. When purchasing stock in a secondary market, usually the price for a large amount of stock will vary for each stock as the investor will need to buy from various sources at different prices. Cost per share then acts as an average stock price for the investor.

Step 1

Determine the amount of shares an investor bought. For example, an investor bought 500,000 shares of Company A.

Step 2

Determine how much the investor paid for the shares. In our example, the investor paid $1,000,000 for all the shares.

Step 3

Divide the cost of the shares by the total amount of shares bought to determine cost per share. In our example, $1,000,000 divided by 500,000 shares equals $2 per share.