View source for Volume-weighted average price

''Statistics - market prices''.

(VWAP).

A weighted average is a type of average, calculated using consistent appropriate weighting factors, for example volumes of assets or contracts traded.

Volume-weighted average price is an average price calculation, that uses volumes traded as the weighting factors.


:<span style="color:#4B0082">'''''Pricing options - share buybacks'''''</span>

:"Some [equity share] buybacks are carried out for a fixed commission. 

:However, most UK buybacks incorporate some sort of incentive for the brokers to buy as many shares as possible within the set budget. 


:This ensures the company pays the lowest possible price for its shares. 

:At the end of the programme, the broker will calculate the average price per share the company has paid over the life of the programme and compare that to a benchmark price. 


:The benchmark price is usually the volume-weighted average price (VWAP) per share in the market for the period, sometimes with a discount applied. 


:[Share buyback] pricing models include: 

::(1) VWAP guarantee: the company always pays VWAP for the shares. A true-up payment is made at the end of the programme to cover the difference between actual amount paid and the VWAP price. 

::(2) A variation is sometimes seen, where the guaranteed price is a set discount to VWAP. 

::(3) Upside sharing: the company and the broker split the difference between VWAP (or discounted VWAP) and the actual cost of shares (again with a true-up payment at the end).

:''Share buybacks: what treasurers need to know - Lucy Reeve, corporate partner, Linklaters LLP - The Treasurer - Issue 4 of 2024, p38.''


== See also ==
* [[Arithmetic mean]]
* [[Assets]]
* [[Average]]
* [[Benchmark]]
* [[BBSW calculation methodology]]
* [[Broker]]
* [[Buyback]]
* [[Contract]]
* [[Discount]]
* [[Equity share]]
* [[First in first out]]  (FIFO)
* [[Geometric mean]]
* [[Inventory]]
* [[Last in first out]]  (LIFO)
* [[Mean]]
* [[Median]]
* [[Mode]]
* [[Moving average]]
* [[Simple average]]
* [[Statistics]]
* [[True-up]]
* [[Weighted average]]
* [[Weighted average cost]]
* [[Weighted average carbon intensity]]  (WACI)
* [[Weighted average cost of capital]]  (WACC)
* [[Weighted Average Final Maturity]]  
* [[Weighted Average Life]]  (WAL)
* [[Weighted average maturity]]  (WAM)

[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]