Buffett backstops Bank of America with $5 billion

August 24, 2011 07:00 PM

Warren Buffett came to the rescue of Bank of America when he announced his firm, Berkshire Hathaway, would invest $5 billion into the beleaguered financial firm.

Berkshire Hathaway has agreed to buy 50,000 preferred shares that will pay a 6% annual dividend. According to CNBC, Buffett approached Bank of America early Wednesday about a potential deal.

“I remain confident that we have the capital and liquidity we need to run our business,” Bank of America chief executive Brian Moynihan said in a statement. “At the same time, I also recognize that a large investment by Warren Buffett is a strong endorsement in our vision and our strategy.”

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