Formula for averaging down stocks

Averaging down a stock is a common activity. But too often i found myself repeating steps time and again for doing the same things. This formula i hope is a time saver.
This is useful when a stock has gone down drastically and the average cost for the investor is much higher. In that case, lets say the investor has a target for the average cost.

Lets say the average cost of X company share is 200 Rs. for an investor. He has 300 shares. Let's assume that the market price of that share has come down drastically to Rs. 50.

But the investor is confident that the intrinsic value of the share is much more than the current market price, and so he wants to buy more. If he wants to bring the average to Rs. 100, how many shares should he buy?

I think the following formula will be useful.. though i still need to tweak it for the rising prices scenario.


Let CMP -> Current market price
Let CAP -> Current average price
Let N -> Number of shares held now
Let TAP -> Targeted average price
Let N1 -> New shares to be bought


Thus, the formula is


N
----- = 1 - R,
N + N1


Where R = (CAP - TAP) / (CAP - CMP)

Applying this formula to the given example, the value of N1 (the number of shares he need to buy) will be 600.

I am not making any explicit claims about the originality of this formula. All i am saying is i formulated this myself and did not wilfully borrow it from external resources.