The Fund is subject to additional investment restrictions which are described in the SAI. The Terms of Use can be accessed from the link https://simple-accounting.org/ at the bottom of the Site pages. Dodge & Cox expressly reserves the right to monitor any and all use of this Site, without liability.

Governments may make derivatives more costly, limit availability, or otherwise adversely affect the value or performance of derivatives and the Fund. For example, in October 2020, the SEC adopted a final rule related to the use of derivatives and certain other instruments by registered investment companies. In connection with the final rule, the SEC and its staff will rescind and withdraw applicable guidance and relief regarding asset segregation and coverage transactions reflected in the Fund’s current practices. Under the new rule, the Fund must choose either to limit its derivatives notional exposure or to impose value-at-risk-based leverage limits and implement new risk management and reporting requirements.

A Primer on Merger and Acquisition Cash-Flow Valuation

The Fund may be required to escheat (transfer to the state) your assets if they are deemed abandoned under a state’s unclaimed or abandoned property law. The following section provides a general summary of U.S. states’ unclaimed or abandoned property information. Current Dodge & Cox Fund shareholders may call Client Services to open an additional account from a pre-established bank account or by exchanging shares from an existing Dodge & Cox Fund account into a new account with the same registration. Many countries have experienced outbreaks of infectious illnesses in recent decades, including swine flu, avian influenza, SARS and, more recently, COVID-19.

Like a bond, a straight preferred does not participate in future earnings and dividend growth of the company, or growth in the price of the common stock. However, a bond has greater security than the preferred and has a maturity date at which the principal is to be repaid. Like the common, the preferred has less security protection than the bond. However, the potential increase in the market price of the common (and its dividends, paid from future growth of the company) is lacking for the preferred. One advantage of the preferred to its issuer is that the preferred receives better equity credit at rating agencies than straight debt (since it is usually perpetual). Also, certain types of preferred stock qualify as Tier 1 capital; this allows financial institutions to satisfy regulatory requirements without diluting common shareholders.

Exercising Voting Rights

The minimum initial investment for shares of the Fund is $2,500 ($1,000 for Individual Retirement Accounts (“IRAs”)) and the minimum subsequent investment is $100. The Fund reserves the right to waive minimum investment amounts for certain https://simple-accounting.org/how-to-sell-preferred-stock/ financial intermediaries that use the Fund as part of an asset allocation program, certain retirement plans, and accounts that hold the Fund in omnibus name. Financial intermediaries may impose their own minimum investment amounts.

There is no assurance that the investment objectives of the Fund will be achieved. The following section describes some of the risks involved in investing in the Fund. The summary below is not a complete list of every risk involved in investing in the Fund and the Fund may have exposure to a risk even if it is not disclosed below.

Redeemable preferred stock definition

By transferring common shares in exchange for fixed-value preferred shares, business owners can allow future gains in the value of the business to accrue to others (such as a discretionary trust). When a corporation goes bankrupt, there may be enough money to repay holders of preferred issues known as “senior” but not enough money for “junior” issues. Therefore, when preferred shares are first issued, their governing document may contain protective provisions preventing the issuance of new preferred shares with a senior claim. Individual series of preferred shares may have a senior, pari-passu (equal), or junior relationship with other series issued by the same corporation. Preferred stock often provides more stability and cashflow compared to common stock. Therefore, investors looking to hold equities but not overexpose their portfolio to risk often buy preferred stock.

• Preferred stock is similar to long-term debt, in that its dividend is generally constant, and preferred stockholders are paid after debt holders but before common shareholders if the firm is liquidated.
• If the Fund has insufficient cash to meet daily variation margin or payment requirements, it may have to sell securities from its portfolio at a time when it may be disadvantageous to do so.
• If shares are callable, the issuer can purchase them back at par value after a set date.
• Equity securities may lose value as a result of changes relating to the issuers of those securities, such as management performance, financial leverage, or changes in the actual or anticipated earnings of a company, or as a result of actual or perceived market conditions that are not specific to an issuer.
• Although there is no restriction on the number of changes in security holdings, purchases generally are made with a view to holding for the long term and not for short-term trading purposes.
• This dividend payment is usually cumulative, so that any suspended payments must be paid by the issuer before it can make any distributions to the holders of its common stock.
• Economic, business, political, or social instability may affect emerging market securities differently, and often more severely, than developed market securities.

Various other factors, including financial strength, economic condition, competitive advantage, quality of the business franchise, and the reputation, experience, and competence of a company’s management are weighed along with valuation in selecting individual securities. The Fund also considers the economic and political stability of the country where the issuer is located and the protections provided to shareholders. The Fund may invest in companies of any size, including large-, medium-, and small-cap companies. Preferred stocks are also an ownership interest in an enterprise, but the company promises the preferred shareholders that if income is paid out, and if there is not enough income to pay all shareholders, the preferred shares will be paid before the common shares.

Dodge & Cox may periodically modify these Terms of Use, and any such modifications will be effective immediately upon posting. We suggest that you periodically check these Terms of Use for modifications. There may also be a provision in redeemable preferred stock that the issuer can only buy back this type of stock on or after a certain date. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. Preferred stock is often compared to as bonds because both may offer recurring cash distributions.

• Fund Organization Dodge & Cox Funds, a Delaware statutory trust (the “Trust”), is a family of seven no-load mutual funds.
• They can be highly volatile and may have no voting rights, pay no dividends, and have no rights with respect to the assets of the entity issuing them.
• The Fund reserves the right to waive minimum investment amounts for certain financial intermediaries that use the Fund as part of an asset allocation program, certain retirement plans, and accounts that hold the Fund in omnibus name.
• The exchange may happen when the investor wants, regardless of the prices of either share.