Cheryl invested $1,000 on Monday. Each day after that the stock increased 1% of its original value. On Wednesday she was charged an administrative fee of $10. Question Graph the value of the stock account at the end of each day.
Answer: Calculate your original basis for all of the shares you purchased, including commissions, by multiplying the number of shares purchased by the price per share. For example, if you paid $20 per share for 100 shares, multiply $20 by 100 to get $2,000.
Add the commission paid to figure your total basis in the stocks. In this example, if you paid a $10 commission, add $10 to $2,000 to get $2,010.
Calculate the number of shares you have after the reverse stock split by dividing the number of shares you originally owned by the number of old shares that are equal to one new share. Continuing the example, if the company performed a 1-for-5 reverse stock split, divide the original 100 shares by 5 to get 20 new shares.
Divide the total basis by the number of shares you have after the stock split to calculate the average cost basis. Finishing this example, divide your $2010 basis by your 20 new shares to find your average cost basis per share is $100.50.