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B of A rallies 24% on Buffett's $5 billion stake 08/25 08:26 AM

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NEW YORK (MarketWatch) -- Bank of America Corp. (BAC:$6.9900,$0.6900,10.95%) rallied 24% to $8.67 a share in pre-market trades on Thursday after billionaire Warren Buffett's investment company Berkshire Hathaway said it would invest $5 billion in the financial conglomerate. Berkshire agreed to purchase 50,000 shares of cumulative preferred stock with a liquidation value of $100,000 a share in a private offering. The preferred stock carries an annual dividend yield of 6% and is redeemable by the company at any time at a 5% premium. "I am impressed with the profit-generating abilities of this franchise, and that they are acting aggressively to put their challenges behind them," Buffett said in a statement.