Berkshire Hathaway Earned 28% per year on its 6 year, $5 billion investment in BofA

Berkshire Hathaway exercised its Bank of America warrants to purchase 700 million shares at $7.14 per share.

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These shares have a current market value of about $16.5 billion. Berkshire’s initial cost in August 2011 was $5 billion (6% preferred stock plus warrants to purchase 700 million shares at $7.14). Its return of 28% per annum includes its compounded annual rate of return of 22% on Bank of America common stock plus its 6% annual dividend on Bank of America preferred stock.