1. What is Price Per Share?

Price Per Share represents the monetary value of a single share of a company's stock. It is calculated by dividing the company's market capitalization by the total number of outstanding shares.

2. How Does the Calculator Work?

The calculator uses the Price Per Share formula:

Where:

• \( P \) — Price per share (dollars)
• \( MC \) — Market capitalization (dollars)
• \( S \) — Total number of shares outstanding

Explanation: This formula provides the fundamental valuation metric for individual shares of a company's stock.

3. Importance of Price Per Share Calculation

Details: Price per share is a critical metric for investors to evaluate stock valuation, compare companies within the same industry, and make informed investment decisions.

4. Using the Calculator

Tips: Enter market capitalization in dollars and total number of shares outstanding. Both values must be positive numbers greater than zero.

5. Frequently Asked Questions (FAQ)

Q1: What is market capitalization?
A: Market capitalization is the total market value of a company's outstanding shares, calculated by multiplying the current stock price by the total number of outstanding shares.

Q2: Why is price per share important for investors?
A: It helps investors determine if a stock is overvalued or undervalued relative to similar companies and assess the affordability of investing in a particular stock.

Q3: Does a higher price per share mean a better company?
A: Not necessarily. The price per share must be considered in context with other financial metrics and the company's overall market capitalization.

Q4: How often does price per share change?
A: Price per share fluctuates continuously during trading hours based on market supply and demand dynamics.

Q5: Can price per share be used to compare companies of different sizes?
A: While useful, price per share should be used alongside other metrics like P/E ratio and market cap for meaningful comparisons between companies of different sizes.