E8.11. Conversion of Stock Warrants: Warren Buffett and Goldman Sachs (Easy) In September 2008, in the midst of the credit crisis on Wall Street, Goldman Sachs invited Warren Buffett, the legendary fundamental investor, to contribute much-needed equity cap- ital to the firm. Buffett seemingly got a very good deal. For a $5 billion cash infusion, he received perpetual preferred equity shares carrying a 10 percent dividend (redeemable by Goldman Sachs) plus warrants to buy 43.5 million common shares at $115 per share (for a total of another $5 billion). The S115 conversion price was set at the current share price, a three-year low for Goldman. If Buffet exercises the warrants when Goldman Sachs's per- share price is $150, what is the loas to Goldman's shareholders? Real World Connection See Exercises E1.6, E4.14, E6.13, E7.7, E10.11, E17.10, and E19.4. Minicases M8.1 in this chapter and M12.2 also deal with Microsoft.