Warren Buffett's Berkshire Hathaway Inc. ( (BRK.A - Get Report) ) announced that it will be purchasing 700 million shares of Bank of America Corp. ( (BAC - Get Report) ) at below market price, making the investment firm Bank of America's largest shareholder.

Berkshire will use $5 billion worth of preferred shares to complete the purchase at $7.14 per common share, well below the bank's previous closing price of $24.32 per share.

As part of its annual stress test, the Federal Reserve approved Bank of America's 60% dividend hike to 48 cents per share annually, as well as its plan to buy back $12.9 billion in stock.

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