A weighted average is an average (or mean) in which each factor is multiplied by a number that reflects its importance. For example, imagine you have 20 shares of Company A that are each worth $10, and 30 shares of Company B that are each worth $5. When you want to find out the average price of each of your shares, you would multiply the number of A shares you own (20) by their value ($10) (=$200), then do the same for Company B (30 × $5 = $150). Add these two values together ($200 + $150 = $350), and divide by the total number of shares (20 + 30 = 50). Your weighted average, then is $350 ÷ 50, or $7.