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As far as I am concerned - it's just like you were buying new...

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pintohoo

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04/04/16

14:52

Post #: 17416993
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Originally posted by Cursed79 ↑

I’m a bit confused as to how to calculate average buy price when recieving shares as part of a dividend reinvestment plan (DRP).

If I buy a 1,000 shares @ $1 each my ave buy price is $1 and total cost $1,000 (forget about brokerage). If I recieve 50 shares as part of a DRP for let’s say 90c each do I add the $45 (50 x $0.9) to the total cost? So it now becomes 1050 shares @ $1,045 cost or is it still $1,000 cost?

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As far as I am concerned - it's just like you were buying new shares with cash - as far as your average holding goes.

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