Outstanding shares refers to stock that is currently held by investors, including shares held by the publicÂ and restricted shares that are owned by company officers and insiders. The number of outstanding shares can change in response to such events as the company issuing new shares, repurchasing existing shares and employee options being converted into shares. The weighted average shares outstanding, or the weighted average of outstanding shares, is a calculation that takes into consideration any changes in the number of outstanding shares over a specific reporting period.
In general, the weighted average is a mean value calculated by averaging each quantity against an assigned weighting to determine a relative importance of each quantity on the average.Â
Weighted Average Number of Shares
The weighted average number of shares is determined by taking the number of outstanding shares and multiplying it by the percentage of the reporting period for which that number applies, and doing this for each period. In other words, the formula takes the number of shares outstanding during each month, weighted by the number of months that those shares were outstanding.
Weighted AverageÂ Cost Per Share
Investors may choose to use average weighted averages if they have compiled a position in a particular stock over a period of time. As stock prices change daily, the investor may wantÂ to calculate a weighted average of the share price he paid for the shares. In order to calculate the weighted average cost per share, the investor can multiply the number of shares acquired at each price by that price, add those values and then divide the total value by the total number of shares
Weighted averages may also be used in other aspects of finance, including calculating portfolio returns, inventory accounting and valuation.Â
Weighted Average SharesÂ Outstanding
The weighted average shares outstanding figure is used to calculate key financial metrics such as earnings per share. Basic EPS, for example, is calculated as follows:
Basic EPS = (net income â€“ preferred dividends) / weighted average shares outstanding
Basic Weighted Average Shares
Basic weighted average shares, on the other hand, represents the abovementioned weighted average shares outstanding, less the dilution of stock options for a specific period. In "basic weighted average shares," the term "basic" essentially means nondilutive. Dilution occurs when a company issues additional shares that reduce an existing investor's proportional ownership in the company. Companies that have simple capital structures only need to report basic EPS. Those with complex structures (those that have potential dilutive securities) must report both basic EPS and diluted EPS.

What is the weighted average of outstanding shares? How is it calculated?
The weighted average of outstanding shares is a calculation that incorporates any changes in the amount of outstanding shares ... Read Answer >> 
What's the difference between basic shares and fully diluted shares?
Find out more about basic outstanding shares, fully diluted shares, the difference between the calculation of shares and ... Read Answer >> 
What's the difference between moving average, weighted moving average and exponential ...
Moving averages are one of the most popular tools used by active traders to measure momentum. In this FAQ, we'll take a look ... Read Answer >> 
How is the value of the S&P 500 calculated?
The S&P 500 is a U.S. market index that gives investors an idea of the overall movement in the U.S. equity market. The value ... Read Answer >> 
What is the difference between authorized shares and outstanding shares?
Calculating financial ratios can help investors understand a company's financial position, but only when a knowledge of various ... Read Answer >>

Investing
S&P 500 ETFs: Market Weight Vs. Equal Weight (RSP, SPY)
Both S&P 500 and S&P 500 EWI indexes include the same set of stocks, but different weighting strategies give them separate individual properties. 
Managing Wealth
Weighted Average Cost Of Capital (WACC)
Weighted average cost of capital may be hard to calculate, but it's a solid way to measure investment quality 
Investing
The Dangers of Share Dilution
Investors need to be aware of dilutive securities and how they can affect existing shareholders. 
Trading
Weighted Moving Averages: The Basics
We take a closer look at the linearly weighted moving average and the exponentially smoothed moving average. 
Investing
What's A Companyâ€™s Worth, And Who Determines Its Stock Price?
A companyâ€™s worth is the same as its market capitalization. Market capitalization is stock price multiplied by number of outstanding shares. 
Insights
The Consumer Price Index
Find out how this economic measure can help you make key financial decisions. 
Investing
3 Types Of Indexing For ETF Success
ETF success relies on the index with which it's paired. Discover three index genres for tracking average market performance. 
Trading
Weight Watchers Stock Extends Impressive Rally
Weight Watchers shares broke out following positive Q4 earnings, but traders will be watching these key levels ahead.

Weighted Average
An average in which each quantity to be averaged is assigned ... 
Outstanding Shares
Outstanding shares refer to a company's stock currently held ... 
Portfolio Weight
The percentage composition of a particular holding in a portfolio. ... 
Weighted Average Market Capitalization
The weighted average market capitalization is a stock market ... 
Fully Diluted Shares
The total number of shares that would be outstanding if all possible ... 
Weighted Average Credit Rating
The weighted average credit rating is the weighted average rating ...