How to Calculate Weighted Average Shares With Stock Split
- 1). Determine the total cost basis before the stock split. Cost basis will generally be what you paid for the stock. Other rules apply if you received the stock as a gift or inheritance. Stock dividends received change the number of shares you have. Receiving stock dividends does not change the total cost basis.
- 2). Determine the number of shares after the stock split. If you had 100 shares before a two for one split, then you now have 200 shares. If you had 100 shares before a three for one split, then you now have 300 shares.
- 3). Use a calculator to divide the total cost basis before the stock split by the number of shares you have after the stock split. For example, you had 100 shares with a total cost basis of $2,400.00 before a three for one split. Divide $2,400.00 (basis) by 300 shares (number of shares after split). The result is you new cost basis per share, in this example $8.00 per share.
- 4). Calculate basis for any shares you sell after the split. If you sell 200 of the shares in the example, the basis of the shares sold is $8.00 times 200 shares sold equals $1,600.00. The basis of the unsold shares is $8.00 times 100 shares remaining equals $800.00.
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