What is the initial cost basis per share for the investor in the ABC stock example?

In determining the initial cost basis per share for an investor in a stock like ABC, it is important to consider the total cost incurred by the investor in acquiring the shares, which includes the purchase price of the shares as well as any additional costs directly associated with the transaction, such as brokerage fees or commissions.

In this case, if the correct cost basis per share is $83, it suggests that the investor purchased the shares at a price lower than some of the other options due to discounts, deductions, or effective pricing due to market fluctuations or discounts provided during the purchase.

Understanding that the primary elements influencing the cost basis are the price paid per share and any additional expenses paid at the time of the transaction helps clarify why $83 is the accurate figure. If one were to calculate the total investment amount divided by the number of shares acquired, this would corroborate the $83 figure as the initial investment's impact.

Thus, knowing how to properly account for all associated costs with the acquisition of the stock clarifies how this particular initial cost basis is calculated, reinforcing the importance of understanding cost basis in stock investments.