How to Calculate the Shares of a Common Stock Offer

by Scott Levin

When an individual is preparing to purchase a company's stock, he evaluates many aspects of that company's value. Because the market fluctuates daily based on stock sales, determining a firm number for certain values can be a difficult task. When trying to calculate the number of shares in a given stock offer, you must know the company's market capitalization, or value, and the price per share of the company's stock.

Determine the company's market capitalization. This figure serves as the total value of a company's outstanding stock. Look up the company on a financial website, such as Yahoo! Finance, Google Finance or NASDAQ.com, to find the market capitalization.

Determine the price per share of a company's stock. This figure changes throughout the day as stocks are bought and sold. Find the price per share by looking up the company on the aforementioned sites.

Divide the market capitalization by the price per share to calculate the number of shares. For example, a company with a market capitalization of $90 million and a price per share of $3 has approximately 30 million outstanding shares available for public offers.

Tip

  • Compare the company's market capitalization to its book value to see if the stock is performing under or over expectations. The book value can be found in a company's quarterly report, which features a company's earnings per share over the past three months.

About the Author

Based in California, Scott Levin has served as a writer and copy editor since 2000. His articles have appeared in the "Chico News & Review," "Wildcat Illustrated," the "Chico Enterprise-Record" and on websites such as The Sports Informant. Levin earned his Bachelor of Arts in journalism from California State University, Chico.

Photo Credits

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