Berkshire Hathaway exercised its Bank of America warrants to purchase 700 million shares at $7.14 per share. 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). Berkshire’s $5 billion investment has resulted in a profit of about $13 billion ($11.5 billion capital gains in Bank of America common stock, plus $1.8 billion in Bank of America preferred stock dividends). 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.