  Fe$_5$SiB$_2$ has been synthesized and magnetic measurements have been
carried out, revealing that M$_{\text{sat}}$ = 0.92 MA/m at T = 300 K. The M vs
T curve shows a broad peak around T = 160 K. The anisotropy constant, K$_1$,
estimated at T = 300 K, is 0.25 MJ/m$^3$. Theoretical analysis of Fe$_5$SiB$_2$
system has been carried out and extended to the full range of
Fe$_5$Si$_{1-x}$P$_x$B$_2$, Fe$_5$P$_{1-x}$S$_x$B$_2$, and
(Fe$_{1-x}$Co$_x$)$_5$SiB$_2$ compositions. The electronic band structures have
been calculated using the Full-Potential Local-Orbital Minimum-Basis Scheme
(FPLO-14). The calculated total magnetic moments are 9.20, 9.15, 9.59 and
2.42$\mu_B$ per formula units of Fe$_5$SiB$_2$, Fe$_5$PB$_2$, Fe$_5$SB$_2$, and
Co$_5$SiB$_2$, respectively. In agreement with experiment, magnetocrystalline
anisotropy energies (MAE's) calculated for T = 0 K changes from a negative
(easy-plane) anisotropy -0.28 MJ/m$^3$ for Fe$_5$SiB$_2$ to the positive
(easy-axis) anisotropy 0.35 MJ/m$^3$ for Fe$_5$PB$_2$. Further increase of the
number of p-electrons in Fe$_5$P$_{1-x}$S$_x$B$_2$ leads to an increase of MAE
up to 0.77 MJ/m$^3$ for the hypothetical Fe$_5$P$_{0.4}$S$_{0.6}$B$_2$
composition. Volume variation and fixed spin moment calculations (FSM)
performed for Fe$_5$SiB$_2$ show an inverse relation between MAE and magnetic
moment in the region down to about 15\% reduction of the spin moment. The
alloying of Fe$_5$SiB$_2$ with Co is proposed as a practical realization of
magnetic moment reduction, which ought to increase MAE. MAE calculated in
virtual crystal approximation (VCA) for a full range of
(Fe$_{1-x}$Co$_x$)$_5$SiB$_2$ compositions reaches the maximum value of 1.16
MJ/m$^3$ at Co concentration x = 0.3, with the magnetic moment 7.75$\mu_B$ per
formula unit. Thus, (Fe$_{0.7}$Co$_{0.3}$)$_5$SiB$_2$ is suggested as a
candidate for a rare-earth free permanent magnet.
