International Business Machines Corp. (NYSE: IBM), the No. 2 computer company, announced a 13 percent boost in its dividend Tuesday, as well as a $7 billion share buyback.

As a result, the quarterly dividend on IBM shares will be 85 cents, Last year, the dividend was boosted to 75 cents. The increase takes effect June 9 for shareholders of record on May 10.

The Armonk, N.Y., company also said it will repurchase shares valued at $7 billion, boosting the total amount available for buybacks to $12.7 billion. It may also seek to buy back more shares later in 2012.

The announcement came just before IBM convened its annual meeting in Charleston, S.C., the first to be addressed by new CEO Virginia Rometty.

The announcement surely pleased one recent investor in IBM, Berkshire Hathaway CEO Warren E. Buffett. Last year, Berkshire acquired about 5.5 percent of IBM for $10.7 billion when Buffett said he considered it well-run and a consistent performer. He also wrote a note to shareholders explaining the move and urging IBM to buy back more shares, so as to make his shares more valuable and its dividend stream higher.

IBM currently has 1.15 billion outstanding shares.

Shares of Berkshire Hathaway rose $631 to $118,925 in Tuesday trading.

IBM shares rose $3.45 to $202.07  in early trading.