Buffett reaps $10B on Goldman
WARREN Buffett bagged nearly $10 billion in interest, fees and dividends on the $5 billion lifeline he extended to Goldman Sachs in 2008.
The huge sum came after Goldman got the green light from the Federal Reserve to buy back $5 billion of preferred shares.
Goldman was among the banks that won government approval to return money to investors after undergoing a new round of so-called stress tests to determine their financial stability.
Within minutes of learning that they passed, 19 financial institutions that were forced to cut shareholder payouts to conserve capital during the financial crisis announced they would boost dividends.
Redeeming Buffett's Berkshire Hathaway stake has been a priority for Goldman because of the 10 per cent dividend that made Buffett nearly $500 million a year.
For roughly two and a half years of work, Buffett raked in $1.27 billion in dividends, according to estimates from the newspaper and Linus Wilson, an assistant finance professor at the University of Louisiana at Lafayette.
Berkshire is expected to continue to hold onto its warrants, which have a strike price of $115 a share.
source: news.com.au
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