T. Rowe Price Capital Appreciation Fund I Class (TRAIX) N-CSR Certified annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED

MANAGEMENT INVESTMENT COMPANIES

Investment Company Act File Number: 811-04519

T. Rowe Price Capital Appreciation Fund, Inc.

(Exact name of registrant as specified in charter)

100 East Pratt Street, Baltimore, MD 21202

(Address of principal executive offices)

David Oestreicher

100 East Pratt Street, Baltimore, MD 21202

(Name and address of agent for service)

Registrant’s telephone number, including area code:  (410) 345-2000

Date of fiscal year end: December 31

Date of reporting period: December 31, 2022

Item 1. Reports to Shareholders

(a) Report pursuant to Rule 30e-1

Highlights

and

Market

Commentary

Management’s

Discussion

of

Fund

Performance

Performance

and

Expenses

Financial

Highlights

Portfolio

of

Investments

Financial

Statements

and

Notes

Additional

Fund

Information

December

31,

2022

Annual

Report

For

more

insights

from

T.

Rowe

Price

investment

professionals,

go

to

troweprice.com

.

T.

ROWE

PRICE

PRWCX

Capital

Appreciation

Fund

–

.

PACLX

Capital

Appreciation

Fund–

.

Advisor  Class

TRAIX

Capital

Appreciation

Fund–

.

I Class

T.

ROWE

PRICE

Capital

Appreciation

Fund

HIGHLIGHTS

Markets

turned

sharply

lower

after

a

run

of

above-average

returns

in

recent

years.

Concerns

over

inflation,

aggressive

monetary

policy,

and

rising

fears

of

a

global

recession

drove

the

market

decline.

Your

fund

declined

by

11.9%

versus

the

S&P

500

Index’s

18.1%

loss

in

2022.

The

fund

continued

to

deliver

strong

long-term

risk-adjusted

returns,

generating

97%

of

the

S&P

500’s

return

while

taking

just

70%

of

the

index’s

risk

over

the

last

five

years.

We

are

more

optimistic

coming

into

2023

than

we

were

coming

into

2022

as

sentiment

has

gone

from

euphoric

to

negative,

valuations

have

improved,

and

we

believe

inflation

should

come

down

through

2023

and

into

2024.

We

see

pockets

of

value

in

cyclical

and

“growth

at

a

reasonable

price”

stocks,

as

well

as

in

the

utilities

sector,

in

high-quality

high

yield

debt

and

loans,

and

in

select

large-cap

names

that

offer

improved

valuations

after

a

period

of

weakness.

Log

in

to

your

account

at

troweprice.com

for

more

information.

*

Certain

mutual

fund

accounts

that

are

assessed

an

annual

account

service

fee

can

also

save

money

by

switching

to

e-delivery.

T.

ROWE

PRICE

Capital

Appreciation

Fund

Management’s

Discussion

of

Fund

Performance

3

Fellow

Shareholders

After

three

consecutive

years

of

above-average

stock

market

returns

in

which

the

S&P

500

essentially

doubled,

markets

fell

sharply

in

2022

with

an

18%

decline

in

the

S&P

500

and

a

13%

decline

in

the

Bloomberg

U.S.

Aggregate

Bond

Index.

So

what

happened?

Higher-than-expected

inflation

—Inflation

was

materially

higher

than

expected

for

two

main

reasons.

First,

the

largest

component

of

the

consumer

price

index,

owners’

equivalent

rent,

surprised

to

the

upside

and

will

likely

stay

elevated

through

2023

as

the

lagged

effect

of

a

spike

in

new

rent

levels

in

2020–2021

fully

works

its

way

through

to

existing

renters

in

2022–2023.

The

good

news

here

is

that

new

rent

levels

have

started

stabilizing,

and

additional

apartment

supply

should

hit

the

market

in

2024–2025.

But

we

still

need

another

year

plus

to

reprice

existing

tenants

to

new

market

levels

in

2023

and

early

2024.

Second,

goods

prices,

which

historically

have

been

deflationary,

spiked

in

2021

and

stayed

higher

than

expected

in

2022

as

supply

chain

disruptions

took

longer

to

fix.

Again,

the

good

news

is

that

goods

prices,

especially

for

used

cars,

are

moving

in

the

right

direction

and

should

be

deflationary

in

2023

as

supply

chain

issues

and

labor

shortages

continue

to

improve.

Fed

raises

rates

aggressively

—Coming

into

2022,

the

Fed

funds

rate

was

set

at

0%

to

0.25%,

which

did

not

make

any

sense

given

that

inflation

had

been

rising

in

the

second

half

of

2021

and

the

economy

was

reasonably

strong.

There

was

no

logical

reason

rates

should

have

been

that

low

coming

into

2022.

However,

the

Federal

Reserve

recognized

its

mistake

and

through

2022

raised

rates

all

the

way

to

4.25%

to

4.50%.

This

was

one

of

the

most

aggressive

one-year

hiking

cycles

in

the

history

of

the

Federal

Reserve.

In

addition,

Fed

officials

have

been

very

vocal

about

continuing

to

raise

rates

and

keep

short-term

rates

high

in

order

to

bring

down

near-term

inflation.

The

massive

increase

in

short-term

rates

put

downward

pressure

on

bond

prices

and

was

the

principal

reason

for

the

13%

decline

in

the

Bloomberg

U.S.

Aggregate

Bond

Index.

Increased

fear

of

recession

—The

aggressive

rate

hikes

by

the

Federal

Reserve

were

intended

to

slow

down

the

economy

and

reduce

inflation.

These

short-term

interest

rate

hikes

caused

the

yield

curve

(the

difference

between

three-month

Treasury

bills

and

10-year

Treasury

bonds)

to

T.

ROWE

PRICE

Capital

Appreciation

Fund

4

invert—and

inverted

yield

curves

have

historically

preceded

recessions.

We

essentially

went

from

a

period

in

late

2021

when

no

one

was

calling

for

a

recession

to

a

period

in

which

it

seems

every

economic

soothsayer,

market

strategist,

and

high-profile

CEO

was

engaging

in

a

public

market

duel

to

see

who

could

be

the

most

bearish

on

the

economy.

While

the

risk

of

a

recession

is

clearly

elevated

today,

it

is

not

a

certainty.

And

even

if

there

is

a

recession,

we

believe

it

will

likely

be

mild

for

a

couple

of

reasons.

First,

some

of

the

most

cyclical

parts

of

the

economy,

such

as

automotive

production

and

commercial

aerospace

production,

are

already

at

recessionary

levels

and

are

far

more

likely

to

increase

in

2023

than

decline.

Second,

capital

spending,

historically

the

most

volatile

part

of

gross

domestic

product

(GDP),

is

likely

to

hang

in

better

in

2023

than

in

prior

downturns

simply

because

the

returns

on

capital

investment

to

address

supply

chain

challenges

and

augment

or

replace

high-cost

labor

are

quite

high

today.

In

addition,

incremental

capital

spending

from

reshoring

and

some

of

the

provisions

of

the

Inflation

Reduction

Act

should

be

supportive

in

2023

and

beyond.

Speculative

excess

coming

out

of

the

market

—There

were

multiple

bubbles

that

formed

in

2020–2021.

There

was

a

crypto

bubble

that

valued

various

coins

at

increasingly

higher

valuations

and

collapsed

in

2022,

culminating

in

the

bankruptcy

and

fraud

at

FTX.

There

was

a

special

purpose

acquisition

company

(SPAC)

bubble

in

which

investors

handed

over

billions

of

dollars

in

new

SPAC

IPOs

despite

the

fact

that

investors

and

even

the

owners

of

the

SPACs

themselves

did

not

know

what

businesses

they

would

eventually

buy

with

the

proceeds.

The

valuations

for

parts

of

the

tech

industry

and

private

companies

were

elevated

throughout

2021,

with

the

poster

child

probably

being

Tesla

(which

is

still

just

a

car

company)

trading

at

a

valuation

of

more

than

$1

trillion.

This

market

capitalization

represented,

at

its

peak,

more

than

two

times

the

value

of

every

publicly

traded

automotive

company

on

the

planet.

Some

of

the

air

coming

out

of

this

bubble

is

related

to

higher

interest

rates

putting

downward

pressure

for

the

highest-valued

companies

in

the

market,

but

maybe

more

importantly,

fundamentals

weakened.

What

is

striking

to

me

is

that

many

of

these

companies’

stock

prices

have

now

fallen

60%

to

80%

from

their

peaks

and

yet,

even

after

all

that

carnage,

we

struggle

to

find

attractive

investment

ideas

within

this

group

as

economic

valuations

(adding

in

stock

comp)

still

seem

high

relative

to

what

we

think

is

a

realistic

growth

rate

for

the

next

five

to

10

years.

Mega-cap

tech

weakness

—This

is

the

area

that

probably

surprised

us

the

most

in

2022.

Valuations

on

most

of

these

companies

coming

into

2022

seemed

reasonable

on

most

metrics.

All

of

these

companies

(Amazon,

Microsoft,

Salesforce,

Meta,

Apple,

Alphabet)

started

experiencing

a

T.

ROWE

PRICE

Capital

Appreciation

Fund

5

slowdown

in

their

revenue

growth

sometime

in

2022

from

a

combination

of

tough

comparisons

and

a

slowing

economy,

as

well

as

foreign

exchange

pressures.

These

stocks

probably

would

have

underperformed

simply

because

they

are

higher

beta

and

traded

at

a

premium

to

the

market.

However,

what

really

exacerbated

the

losses

with

Meta,

Alphabet,

and

Amazon

was

the

weakness

of

their

margins,

as

these

companies

spent

aggressively

on

hiring

and

new

business

initiatives.

Amazon

is

the

poster

child

for

this

as

we

expect

it

will

likely

post

lower

operating

profit

in

2023

than

2019,

despite

adding

$30

billion

in

earnings

before

interest

and

taxes

(EBIT)

from

advertising

and

Amazon

Web

Services

over

this

time

period.

This

implies

that

the

core

retail

business

and

new

business

initiatives

are

now

losing

tens

of

billions

of

dollars.

These

mega-cap

companies

are

all

large

parts

of

the

S&P

500,

and

their

weakness

put

further

downward

pressure

on

the

market.

The

good

news

here

is

that

these

companies

have

started

to

show

signs

of

discipline

on

expenses.

And

with

materially

easier

topline

comparisons

in

the

second

half

of

2023—including

foreign

exchange

going

from

a

headwind

to

a

tailwind—the

setup

for

these

stocks

looks

to

us

to

be

significantly

better

over

the

next

12

to

24

months

than

the

last.

So,

in

our

view,

those

five

factors

are

the

most

important

reasons

2022

was

a

very

disappointing

year

for

investors.

While

we

will

discuss

this

in

more

detail

in

the

outlook

section,

we

are

more

optimistic

coming

into

2023

than

we

were

heading

into

2022

as

sentiment

has

gone

from

euphoric

to

negative,

valuations

have

come

down,

and

we

think

inflation

should

come

down

throughout

2023

and

into

2024.

Having

said

all

of

that,

we

are

not

macro

investors.

We

have

found

that

we

created

the

greatest

alpha

over

time

for

clients

by

focusing

on

finding

attractively

valued

stocks,

bonds,

and

loans

and

by

focusing

on

exploiting

multiple

durable

market

inefficiencies.

This

is

where

we

believe

we

have

a

PERFORMANCE

COMPARISON

Total

Return

Periods

Ended

12/31/22

6

Months

12

Months

Capital

Appreciation

Fund

–

.

2.77‌%

-11.94‌%

Capital

Appreciation

Fund–

.

Advisor  Class

2.62‌

-12.18‌

Capital

Appreciation

Fund–

.

I  Class

2.81‌

-11.84‌

S&P

500

Index

2.31‌

-18.11‌

Lipper

Mixed-Asset

Target

Allocation

Growth

Funds

Index

1.22‌

-15.88‌

Morningstar

Allocation

–

50%

to

70%

Equity

Category

Average

1.07‌

-13.84‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

6

competitive

edge.

We

have

found

that

this

strategy

is

far

superior

to

trying

to

speculate

on

Fed

policy,

GDP

levels,

growth

versus

value,

or

short-term

stock

market

movements—areas

where

we

don’t

have

an

edge

or

a

structural

market

inefficiency

to

exploit.

Before

we

discuss

fund

performance,

I

would

like

to

review

the

three

goals

of

the

Capital

Appreciation

Fund:

(1)

Generate

strong

risk-adjusted

returns

annually

(2)

Preserve

shareholder

capital

over

the

intermediate

term

(i.e.,

three

years)

(3)

Generate

equity-like

returns

with

less

risk

than

that

of

the

overall

market

over

a

full

market

cycle

(i.e.,

normally

five

years)

While

we

were

able

to

outperform

our

peers

and

beat

the

S&P

500

on

a

risk-

adjusted

basis,

our

fund

still

generated

a

negative

return

in

2022.

This

is

only

the

third

time

that

the

Capital

Appreciation

Fund

has

generated

a

negative

calendar

year

return

since

its

inception

back

in

1986.

While

we

are

unable

to

generate

positive

returns

in

every

market

environment,

especially

one

in

which

the

equity

and

fixed

income

markets

are

both

negative,

we

aim

to

keep

negative

return

years

to

a

minimum

by

focusing

on

high

risk-adjusted-return

asset

classes,

focusing

on

the

downside

risk

inherent

in

all

investments

just

as

much

as

on

the

upside,

and

continuing

to

take

advantage

of

market

and

security-

specific

dislocations

that

can

create

alpha

in

the

short

and

long

term.

For

the

year,

your

fund

declined

11.94%

as

compared

with

the

S&P

500’s

18.11%

decline.

(The

performance

of

the

Advisor

and

I

Class

shares

will

vary

due

to

different

fee

structures.)

Your

fund

outperformed

the

market

on

a

risk-adjusted

basis

over

this

period.

We

captured

66%

of

the

S&P

500’s

return

while

taking

on

only

71%

of

the

market’s

risk.

We

arrive

at

this

risk

number

by

comparing

the

standard

deviation

of

the

S&P

500

(24.08)

with

that

of

the

fund

(17.06)

for

the

12-month

period.

Standard

deviation

indicates

the

volatility

of

a

portfolio’s

total

return

as

measured

against

its

mean

performance.

In

general,

the

higher

the

standard

deviation,

the

greater

the

risk.

Using

a

more

academic

measure

of

the

fund’s

risk-adjusted

return,

your

fund

produced

a

Sharpe

ratio

of

-0.79

versus

-0.81

for

the

S&P

500.

The

Sharpe

ratio

measures

a

portfolio's

return

above

the

risk-free

Treasury

rate

(excess

return),

divided

by

the

amount

of

risk

taken

(measured

by

standard

deviation).

The

larger

the

Sharpe

ratio,

the

better

the

portfolio's

risk-adjusted

return.

T.

ROWE

PRICE

Capital

Appreciation

Fund

7

While

technically

we

outperformed

the

S&P

500

on

a

Sharpe

ratio

basis

in

2022,

we

do

not

believe

the

Sharpe

ratio

is

a

great

measure

of

risk-adjusted

returns

when

returns

are

negative.

There

are

academic

papers

that

debate

how

to

interpret

Sharpe

ratios

in

periods

with

negative

returns,

as

well

as

how

the

ratio

might

be

modified

during

such

periods

to

provide

more

insight.

But

the

bottom

line,

in

our

view,

is

that

while

we

technically

outperformed

on

a

Sharpe

ratio

basis,

this

metric

is

basically

irrelevant

during

periods

of

negative

returns.

What

matters

more

is

absolute

returns

–

and

we

feel

good

we

beat

our

peers

and

the

S&P

500

in

a

very

difficult

environment.

As

for

our

second

goal—capital

preservation

over

the

intermediate

term—your

fund

generated

a

23.33%

cumulative

return

over

the

last

three

years.

As

for

our

final

goal—equity-like

returns

with

less

risk

than

the

market

over

a

full

market

cycle—your

fund

generated

a

54.63%

cumulative

return

over

the

last

five

years

versus

56.88%

for

the

S&P

500.

Based

on

annualized

returns

of

9.11%

for

your

fund

versus

9.42%

for

the

S&P

500,

your

fund

generated

97%

of

the

market’s

return

over

the

last

five

years

while

taking

on

70%

of

the

market’s

risk.

However,

since

the

current

portfolio

management

team

took

over

the

management

of

the

fund

in

June

of

2006,

the

fund

outperformed

the

S&P

500

by

delivering

101%

of

the

S&P

500’s

return

while

taking

only

69%

of

the

market’s

risk.

In

addition,

our

equities

outperformed

the

S&P

500

by

167

basis

points

(-16.44%

versus

-18.11%)

in

2022.

Over

the

last

3-,

5-,

and

10-year

periods,

our

equities

outperformed

the

S&P

500

by

an

average

of

267,

368,

and

405

basis

points

annualized,

respectively.

While

our

equities

have

substantially

outperformed

the

market,

our

equities

have

also

been

less

risky

(from

a

beta

perspective)

than

the

market.

Our

fixed

income

investments

outperformed

the

Bloomberg

U.S.

Aggregate

Bond

Index

by

1,050

basis

points

(-2.51%

versus

-13.01)

in

2022

as

we

entered

the

year

with

a

record-low

fixed

income

duration

portfolio

with

no

Treasuries

and

almost

70%

of

the

fixed

income

portfolio

in

floating

rate

loans.

The

floating

rate

loan

index

was

down

less

than

1%,

and,

in

aggregate,

our

loans

generated

positive

returns.

For

the

1-,

3-,

5-,

and

10-year

periods

ended

December

31,

2022,

we

outperformed

our

Lipper

and

Morningstar

peers

over

every

period,

and

in

2022,

we

were

ranked

in

the

26

th

percentile

in

Morningstar

and

14

th

percentile

in

Lipper.

Over

the

3-,

5-

and

10-year

periods,

we

were

in

the

third

percentile

or

better

for

both

peer

groupings.

(Based

on

cumulative

total

return,

the

Capital

Appreciation

Fund

ranked

65

of

468,

6

of

434,

2

of

417,

and

2

of

338

funds

in

the

Lipper

mixed-asset

target

allocation

growth

funds

universe

for

the

1-,

3-,

5-,

and

10-year

periods

ended

December

31,

2022,

respectively.

Based

on

average

annual

total

return,

the

Capital

Appreciation

Fund

ranked

170

of

761,

T.

ROWE

PRICE

Capital

Appreciation

Fund

8

12

of

720,

4

of

697,

and

3

of

612

fund

in

the

Morningstar

Allocation

50%

to

70%

Equity

category

for

the

1-,

3-,

5-,

and

10-year

periods

ended

December

31,

2022,

respectively.

Results

may

vary

for

other

periods.

Past

performance

cannot

guarantee

future

results.

)

As

a

general

rule,

we

focus

much

more

on

trying

to

outperform

the

Morningstar

category

simply

because

the

equity

and

fixed

income

weights

in

this

index

are

much

more

similar

to

the

Capital

Appreciation

Fund’s

long-term

equity

and

fixed

income

weights.

The

Lipper

peers

have

a

larger

structural

allocation

to

equities,

and

in

a

year

like

2022,

when

equity

markets

are

down

materially,

this

structurally

higher

overweight

in

Lipper

artificially

makes

the

Capital

Appreciation

Fund’s

performance

look

better

than

it

really

was.

However,

let

us

reiterate

that

we

do

not

manage

your

fund

to

beat

these

benchmarks.

The

Capital

Appreciation

Fund

has

different

objectives

than

most

of

its

benchmark

peers.

It

is

a

unique

fund

with

a

clear

focus

on

strong

risk-

adjusted

returns,

intermediate-term

capital

preservation,

and

long-term

capital

appreciation

that

does

not

fit

neatly

into

any

current

benchmark.

Within

our

equity

sleeve,

the

consumer

discretionary

sector

was

our

largest

contributor

to

relative

returns.

Almost

all

of

this

alpha

was

a

function

of

our

large

investment

in

Yum!

Brands.

While

Yum!

Brands

faced

headwinds

in

2022

from

a

higher

tax

rate,

the

loss

of

income

from

Russian

franchisees

(Yum

exited

the

Russian

market

following

the

invasion

of

Ukraine),

weak

Chinese

sales

due

to

lockdowns,

and

a

weak

dollar,

the

stock

was

down

only

6%

last

year

and

was

one

of

our

largest

holdings.

The

magic

of

the

Yum

business

is

that

its

restaurants

are

98%

franchised,

its

quick-service

business

is

economically

AVERAGE

ANNUAL

PERFORMANCE

COMPARISON

Periods

Ended

12/31/22

1

Year

3

Years

5

Years

10

Years

Capital

Appreciation

Fund

–

.

-11.94‌%

7.24‌%

9.11‌%

10.83‌%

S&P

500

Index

-18.11‌

7.66‌

9.42‌

12.56‌

Lipper

Mixed-Asset

Target

Allocation

Growth

Funds

Index

-15.88‌

4.11‌

5.11‌

7.51‌

Morningstar

Allocation

–

50%

to

70%

Equity

Category

Average

-13.84‌

3.03‌

4.13‌

6.01‌

The

fund’s

expense

ratio

was

0.70%

as

of

its

fiscal

year

ended

December

31,

2021.

Current

performance

may

be

higher

or

lower

than

the

quoted

past

performance,

which

cannot

guarantee

future

results.

Share

price,

principal

value,

and

return

will

vary,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

For

the

most

recent

month-end

performance

information,

please

visit

our

website

at

troweprice.com

or

call

1-800-225-5132.

T.

ROWE

PRICE

Capital

Appreciation

Fund

9

resilient

and,

in

a

higher

inflation

environment,

its

franchisees

pass

through

this

higher

inflation

to

customers,

which

then

drives

higher

royalty

revenues

to

Yum!

Brands.

The

company

is

run

by

an

exceptional

management

team

that

is

accelerating

new-store

growth,

innovating

more

than

its

peers,

generating

strong

free

cash

flow,

and

returning

excess

cash

to

shareholders.

Our

position

size

in

Yum

came

down

in

late

2022

due

to

the

stock’s

outperformance,

but

it

remains

one

of

our

largest

positions

in

the

fund.

(Please

refer

to

the

fund’s

portfolio

of

investments

for

a

complete

list

of

holdings

and

the

amount

each

represents

in

the

portfolio.)

Information

technology

was

our

second-largest

contributor

to

relative

performance.

Coming

into

2022,

information

technology

was

our

largest

sector

underweight

as

we

felt

valuations

were

elevated.

However,

as

this

sector

fell

sharply

over

the

course

of

2022,

we

added

exposure

and

exited

the

year

with

an

overweight.

Unlike

in

consumer

discretionary,

where

Yum!

Brands

was

solely

responsible

for

our

alpha

generation,

in

information

technology,

there

were

several

contributors.

NXP

Semiconductors

and

Texas

Instruments

were

new

holdings

in

2022,

and

we

bought

both

after

they

were

down

substantially

from

their

late-2021

highs.

We

are

big

believers

that

semiconductor

content

will

continue

to

grow

in

the

high

single

digits

as

electric

and

autonomous

vehicles

continue

to

expand

and

as

industrial

users

add

more

semiconductors

to

gain

data

insights,

drive

better

power

efficiency,

and

enable

more

digital

interfaces.

Both

of

these

companies

have

around

70%

of

their

business

tied

to

the

automotive

and

industrial

end

markets,

have

exceptional

management

teams,

generate

strong

free

cash

flow,

and

return

excess

cash

to

shareholders.

SECTOR

DIVERSIFICATION

Percent

of

Net

Assets

6/30/22

12/31/22

Information

Technology

20.1‌%

17.1‌%

Health

Care

15.2‌ 

14.6‌ 

Industrials

and

Business

Services

11.1‌ 

10.5‌ 

Financials

7.6‌ 

6.8‌ 

Consumer

Discretionary

7.3‌ 

5.1‌ 

Utilities

1.4‌ 

3.2‌ 

Communication

Services

3.4‌ 

2.0‌ 

Energy

0.5‌ 

1.6‌ 

Materials

0.3‌ 

1.0‌ 

Consumer

Staples

0.7‌ 

0.3‌ 

Real

Estate

0.0‌ 

0.0‌ 

Other

and

Reserves

32.4‌ 

37.8‌ 

Total

100.0‌%

100.0‌%

Historical

weightings

reflect

current

industry/sector

classifications.

T.

ROWE

PRICE

Capital

Appreciation

Fund

10

Your

fund

has

employed

a

covered

call

overwriting

strategy

consistently

since

2008.

This

involves

buying

an

equity

security

and

writing

a

call

option

that

becomes

exercisable

at

a

higher

price

in

return

for

an

upfront

premium.

In

2022,

our

covered

call

program

had

a

positive

impact

on

your

fund’s

performance.

The

energy

sector

was

our

worst-performing

sector

on

a

relative

basis

as

the

sector

was

up

66%

in

2022

and

outperformed

the

S&P

500

by

8,400

basis

points.

The

magnitude

of

outperformance

was

somewhat

surprising

as

the

various

oil

prices

(WTI

and

Brent)

were

up

only

7%

to

11%

for

the

year.

However,

the

energy

sector

really

benefited

as

portfolio

managers

bought

the

sector

as

a

way

to

play

higher

inflation.

The

sector

also

benefited

from

geopolitical

instability

associated

with

Russia’s

invasion

of

Ukraine.

While

we

remain

underweight

energy,

we

do

have

exposure

to

what

we

believe

are

the

three

best

companies

in

the

space:

EOG,

Pioneer,

and

ConocoPhillips.

EOG

is

very

good

at

capital

allocation

and

is

a

best-in-class

explorer

of

new

shale

plays

in

the

United

States.

Pioneer

has

the

best

acreage

in

the

heart

of

the

Permian

Basin

and

is

a

takeover

candidate.

ConocoPhillips

has

exceptional

management,

good

capital

allocation,

and

a

well-diversified

portfolio.

Portfolio

Outlook

After

coming

into

2022

cautious

on

markets

and

underweight

stocks

due

to

elevated

valuations,

slowing

earnings

growth,

and

likely

slowing

economic

growth,

we

feel

better

about

2023.

The

S&P

500

fell

18%

last

year,

yet

when

all

is

said

and

done,

earnings

are

likely

to

have

grown

5%

to

6%.

The

combination

of

a

lower

S&P

500

level

and

higher

earnings

means

the

valuation

of

the

market

has

come

down

from

21x

forward

earnings

to

16x

to

17x.

While

investors

are

very

worried

about

a

recession

and

elevated

inflation,

we

believe

inflation

will

continue

to

come

down.

And

even

if

there

is

a

recession,

we

believe

it

will

be

mild.

Regardless

of

how

the

macro

environment

plays

out,

we

will

work

hard

and

endeavor

to

find

a

way

to

outperform,

to

generate

strong

risk-adjusted

returns,

and

to

minimize

downside

risk.

Where

do

we

see

value?

Cyclical

stocks—Many,

but

not

all,

cyclicals

are

already

partially

or

completely

pricing

in

a

recession.

While

this

does

not

mean

they

cannot

go

down

further,

it

does

mean

a

lot

of

bad

news

is

already

priced

in

and

risk/

reward

is

promising.

Banks

and

semiconductor

stocks

look

particularly

compelling

here.

T.

ROWE

PRICE

Capital

Appreciation

Fund

11

Growth

at

a

reasonable

price

(GARP)

stocks—While

GARP

outperformed

last

year,

we

believe

that

over

the

long

term,

GARP

stocks

still

offer

the

best

risk-adjusted

returns

in

the

market.

And

not

all

GARP

stocks

outperformed

last

year;

life

sciences

tools,

exchanges,

and

credit

bureau

spaces

all

look

very

attractive.

Utilities

over

staples—

While

both

sectors

were

flat

to

up

slightly

last

year,

staples

continue

to

trade

at

a

large

premium

to

utilities—despite

the

fact

that

utilities

should

grow

faster

and

have

higher

dividend

yields—and

also

tend

to

have

less

downside

risk,

less

secular

risk,

and

less

foreign

exchange

and

commodity

risk.

High-quality

high

yield

and

loans—We

continue

to

think

high-quality

high

yield

bonds

and

loans

that

currently

yield

7%

to

8%

offer

compelling

risk-

adjusted

returns

relative

to

the

equity

market.

Select

large-cap

tech—As

we

noted

earlier,

we

believe

the

tactical

setup

for

large-cap

tech

stocks

has

improved

versus

12

months

ago

as

valuations

have

come

down

and

investors

have

gone

from

being

overweight

these

stocks

to

universally

underweight.

In

the

second

half

of

2023

or

possibly

early

2024,

we

expect

that

growth

rates

will

stabilize—if

not

improve—and,

maybe

most

importantly,

margins

and

profits

will

start

to

improve.

Where

do

we

not

see

value?

Where

everyone

is

hiding

out—Where

investors

are

seeking

safety

and

where

valuations

are

expensive.

The

most

obvious

areas

are

defense,

energy,

staples,

agriculture,

and

pharmaceuticals.

While

we

have

modest

exposure

to

these

sectors,

we

continue

to

be

massively

underweight.

Speculative

and

profitless

tech—As

mentioned

before,

on

an

economic

basis,

we

still

don’t

see

valuations

as

compelling

given

the

likely

growth

trajectory

from

here.

SECURITY

DIVERSIFICATION

Capital

Appreciation

Fund

T.

ROWE

PRICE

Capital

Appreciation

Fund

12

IN

CLOSING

We

would

like

to

thank

all

the

analysts,

associate

analysts,

quantitative

analysts,

and

members

of

our

team

(Mike

Signore,

Chen

Tian,

Nikhil

Shah,

Vivek

Rajeswaran,

Jared

Duda,

and

Brian

Solomon)

for

their

assistance

in

2022.

At

the

end

of

2022,

we

announced

promotions

and

new

responsibilities

for

three

team

members.

Vivek

Rajeswaran

and

Mike

Signore

have

become

associate

portfolio

managers

of

the

Capital

Appreciation

Strategy.

In

addition,

Brian

Solomon

will

become

the

team

lead

on

fixed

income

analysis

and

work

with

me

on

managing

the

fixed

income

sleeve

of

the

portfolio

and

working

with

our

high

yield

analysts.

The

Capital

Appreciation

team

is

as

strong

and

deep

as

we

have

ever

been.

Respectfully

submitted,

David

R.

Giroux

Chairman

of

the

fund’s

Investment

Advisory

Committee

January

22,

2023

The

committee

chairman

has

day-to-day

responsibility

for

managing

the

portfolio

and

works

with

committee

members

in

developing

and

executing

the

fund’s

investment

program.

The

views

expressed

reflect

the

opinions

of

T.

Rowe

Price

as

of

the

date

of

this

report

and

are

subject

to

change

based

on

changes

in

market,

economic,

or

other

conditions.

These

views

are

not

intended

to

be

a

forecast

of

future

events

and

are

no

guarantee

of

future

results.

T.

ROWE

PRICE

Capital

Appreciation

Fund

13

RISKS

OF

INVESTING

As

with

all

stock

and

bond

mutual

funds,

the

fund’s

share

price

can

fall

because

of

weakness

in

the

stock

or

bond

markets,

a

particular

industry,

or

specific

holdings.

Stock

markets

can

decline

for

many

reasons,

including

adverse

political

or

economic

developments,

changes

in

investor

psychology,

or

heavy

institutional

selling.

The

prospects

for

an

industry

or

company

may

deteriorate

because

of

a

variety

of

factors,

including

disappointing

earnings

or

changes

in

the

competitive

environment.

In

addition,

the

investment

manager’s

assessment

of

companies

held

in

a

fund

may

prove

incorrect,

resulting

in

losses

or

poor

performance

even

in

rising

markets.

A

sizable

cash

or

fixed

income

position

may

hinder

the

fund

from

participating

fully

in

a

strong,

rapidly

rising

bull

market.

In

addition,

significant

exposure

to

bonds

increases

the

risk

that

the

fund’s

share

value

could

be

hurt

by

rising

interest

rates

or

credit

downgrades

or

defaults.

Convertible

securities

are

also

exposed

to

price

fluctuations

of

the

company’s

stock.

GLOSSARY

Lipper

indexes:

 Fund

benchmarks

that

consist

of

a

small

number

of

the

largest

mutual

funds

in

a

particular

category

as

tracked

by

Lipper

Inc.

Morningstar

allocation–50%

to

70%

equity

category

average:

 Tracks

the

performance

of

funds

that

seek

capital

appreciation

and

income

by

investing

in

multiple

asset

classes,

including

stocks,

bonds,

and

cash.

Equity

exposures

range

from

50%

to

70%.

BENCHMARK

INFORMATION

Note:

Bloomberg

®

and the

Bloomberg

U.S.

Aggregate

Bond

Index

are

service

marks

of

Bloomberg

Finance

L.P.

and

its

affiliates,

including

Bloomberg

Index

Services

Limited

(“BISL”),

the

administrator

of

the

index

(collectively,

“Bloomberg”)

and

have

been

licensed

for

use

for

certain

purposes

by

T.

Rowe

Price.

Bloomberg

is

not

affiliated

with

T.

Rowe

Price,

and

Bloomberg

does

not

approve,

endorse,

review,

or

recommend

its

products.

Bloomberg

does

not

guarantee

the

timeliness,

accurateness,

or

completeness

of

any

data

or

information

relating

to

its

products. 

T.

ROWE

PRICE

Capital

Appreciation

Fund

14

Note:

Portions

of

the

mutual

fund

information

contained

in

this

report

was

supplied

by

Lipper,

a

Refinitiv

Company,

subject

to

the

following:

Copyright

2023

©

Refinitiv.

All

rights

reserved.

Any

copying,

republication

or

redistribution

of

Lipper

content

is

expressly

prohibited

without

the

prior

written

consent

of

Lipper.

Lipper

shall

not

be

liable

for

any

errors

or

delays

in

the

content,

or

for

any

actions

taken

in

reliance

thereon.

Note:

©2023

Morningstar,

Inc.

All

rights

reserved.

The

information

contained

therein:

(1)

is

proprietary

to

Morningstar

and/or

its

content

providers;

(2)

may

not

be

copied

or

distributed;

and

(3)

is

not

warranted

to

be

accurate,

complete,

or

timely.

Neither

Morningstar

nor

its

content

providers

are

responsible

for

any

damages

or

losses

arising

from

any

use

of

this

information.

Past

performance

is

no

guarantee

of

future

results.

Note:

The

S&P

500

Index

is

a

product

of

S&P

Dow

Jones

Indices

LLC,

a

division

of

S&P

Global,

or

its

affiliates

(“SPDJI”)

and

has

been

licensed

for

use

by

T.

Rowe

Price.

Standard

&  Poor’s

®

and

S&P

®

 are

registered

trademarks of

Standard

&

Poor’s

Financial

Services

LLC,

a

division

of

S&P

Global (“S&P”);

Dow

Jones

®

is

a

registered

trademark

of

Dow

Jones

Trademark

Holdings

LLC

(“Dow

Jones”);

T.

Rowe

Price

is

not

sponsored,

endorsed,

sold

or

promoted

by

SPDJI,

Dow

Jones,

S&P,

or

their

respective

affiliates,

and

none

of

such

parties

make

any

representation

regarding

the

advisability

of

investing

in

such

product(s)

nor

do

they

have

any

liability

for

any

errors,

omissions,

or

interruptions

of

the

S&P

500

Index.

T.

ROWE

PRICE

Capital

Appreciation

Fund

15

PORTFOLIO

HIGHLIGHTS

TWENTY-FIVE

LARGEST

HOLDINGS

Percent

of

Net

Assets

12/31/22

U.S.

Treasury

Notes

9.1‌%

Microsoft

5.2‌ 

HUB

International

3.6‌ 

PNC

Financial

Services

Group

2.9‌ 

Yum!

Brands

2.5‌ 

Apple

2.4‌ 

Amazon.com

2.1‌ 

GE

2.0‌ 

Intercontinental

Exchange

2.0‌ 

UnitedHealth

Group

2.0‌ 

Fortive

2.0‌ 

Thermo

Fisher

Scientific

1.9‌ 

PerkinElmer

1.8‌ 

NXP

Semiconductors

1.8‌ 

Danaher

1.6‌ 

Ingersoll-Rand

1.6‌ 

TE

Connectivity

1.5‌ 

Ameren

1.5‌ 

Alphabet

1.4‌ 

Texas

Instruments

1.4‌ 

UKG

1.4‌ 

Equifax

1.3‌ 

Waste

Connections

1.3‌ 

Becton,

Dickinson

&

Company

1.3‌ 

TransUnion

1.3‌ 

Total

56.9‌%

Note:

The

information

shown

does

not

reflect

any

exchange-traded

funds

(ETFs),

cash

reserves,

or

collateral

for

securities

lending

that

may

be

held

in

the

portfolio.

T.

ROWE

PRICE

Capital

Appreciation

Fund

16

Equifax

Microsoft

Avantor

Amazon.com

Linde

KKR*

Xcel

Energy*

AbbVie*

Intercontinental

Exchange

UnitedHealth

Group

Microsoft

GE

Amazon.com

Yum!

Brands

Thermo

Fisher

Scientific

Danaher

Alphabet

Becton,

Dickinson

&

Company

S&P

Global

TE

Connectivity

PORTFOLIO

HIGHLIGHTS

MAJOR

PORTFOLIO

CHANGES

Listed

in

descending

order

of

size.

Six

Months

Ended

12/31/2022

Largest

Purchases

Largest

Sales

*Position

added.

T.

ROWE

PRICE

Capital

Appreciation

Fund

17

GROWTH

OF

$10,000 

This

chart

shows

the

value

of

a

hypothetical

$10,000

investment

in

the

fund

over

the

past

10

fiscal

year

periods

or

since

inception

(for funds

lacking

10-year

records).

The

result

is

compared

with

benchmarks,

which

include

a

broad-based

market

index

and

may

also

include

a

peer

group

average

or

index.

Market

indexes

do

not

include

expenses,

which

are

deducted

from

fund

returns

as

well

as

mutual fund

averages

and

indexes.

CAPITAL

APPRECIATION

FUND 

Note:

Performance

for

the

Advisor

and

I Class

shares

will

vary

due

to

their

differing

fee

structures.

See

the

Average

Annual

Compound

Total

Return

table. 

T.

ROWE

PRICE

Capital

Appreciation

Fund

18

AVERAGE

ANNUAL

COMPOUND

TOTAL

RETURN

Periods

Ended

12/31/22

1

Year

5

Years

10

Years

Since

Inception

Inception

Date

Capital

Appreciation

Fund

–

.

-11.94‌%

9.11‌%

10.83‌%

–‌

–

Capital

Appreciation

Fund–

.

Advisor  Class

-12.18‌

8.80‌

10.51‌

–‌

–

Capital

Appreciation

Fund–

.

I  Class

-11.84‌

9.23‌

–‌

9.99‌%

12/17/15

The

fund’s

performance

information

represents

only

past

performance

and

is

not

necessarily

an

indication

of

future

results.

Current

performance

may

be

lower

or

higher

than

the

performance

data

cited.

Share

price,

principal

value,

and

return

will

vary,

and

you

may

have

a

gain

or

loss

when

you

sell

your

shares.

For

the

most

recent

month-end

performance,

please

visit

our

website

(troweprice.com)

or

contact

a

T.

Rowe

Price

representative

at

1

-

800

-

225

-

5132

or,

for

0.02

Advisor

and

0.03

I

Class

shares,

1-800-638-8790.

This

table

shows

how

the

fund

would

have

performed

each

year

if

its

actual

(or

cumulative)

returns

had

been

earned

at

a

constant

rate.

Average

annual

total

return

figures

include

changes

in

principal

value,

reinvested

dividends,

and

capital

gain

distributions.

Returns

do

not

reflect

taxes

that

the

shareholder

may

pay

on

fund

distributions

or

the

redemption

of

fund

shares.

When

assessing

performance,

investors

should

consider

both

short-

and

long-term

returns.

T.

ROWE

PRICE

Capital

Appreciation

Fund

19

EXPENSE

RATIO

FUND

EXPENSE

EXAMPLE

As

a

mutual

fund

shareholder,

you

may

incur

two

types

of

costs:

(1)

transaction

costs,

such

as

redemption

fees

or

sales

loads,

and

(2)

ongoing

costs,

including

management

fees,

distribution

and

service

(12b-1)

fees,

and

other

fund

expenses.

The

following

example

is

intended

to

help

you

understand

your

ongoing

costs

(in

dollars)

of

investing

in

the

fund

and

to

compare

these

costs

with

the

ongoing

costs

of

investing

in

other

mutual

funds.

The

example

is

based

on

an

investment

of

$1,000

invested

at

the

beginning

of

the

most

recent

six-month

period

and

held

for

the

entire

period.

Please

note

that

the

fund

has

three

share

classes:

The

original

share

class

(Investor

Class)

charges

no

distribution

and

service

(12b-1)

fee,

the

Advisor

Class

shares

are

offered

only

through

unaffiliated

brokers

and

other

financial

intermediaries

and

charge

a

0.25%

12b-1

fee,

and

I

Class

shares

are

available

to

institutionally

oriented

clients

and

impose

no

12b-1

or

administrative

fee

payment.

Each

share

class

is

presented

separately

in

the

table.

Actual

Expenses

The

first

line

of

the

following

table

(Actual)

provides

information

about

actual

account

values

and

expenses

based

on

the

fund’s

actual

returns.

You

may

use

the

information

on

this

line,

together

with

your

account

balance,

to

estimate

the

expenses

that

you

paid

over

the

period.

Simply

divide

your

account

value

by

$1,000

(for

example,

an

$8,600

account

value

divided

by

$1,000

=

8.6),

then

multiply

the

result

by

the

number

on

the

first

line

under

the

heading

“Expenses

Paid

During

Period”

to

estimate

the

expenses

you

paid

on

your

account

during

this

period.

Hypothetical

Example

for

Comparison

Purposes

The

information

on

the

second

line

of

the

table

(Hypothetical)

is

based

on

hypothetical

account

values

and

expenses

derived

from

the

fund’s

actual

expense

ratio

and

an

assumed

5%

per

year

rate

of

return

before

expenses

(not

the

fund’s

actual

return).

You

may

compare

the

ongoing

costs

of

investing

in

the

fund

with

other

funds

by

contrasting

this

5%

hypothetical

example

and

the

5%

hypothetical

examples

that

appear

in

the

shareholder

reports

of

the

other

funds.

The

hypothetical

account

values

and

expenses

may

not

be

used

to

estimate

the

actual

ending

account

balance

or

expenses

you

paid

for

the

period.

Capital

Appreciation

Fund

0.70‌%

Capital

Appreciation

Fund–Advisor

Class

0.99‌ 

Capital

Appreciation

Fund–I

Class

0.59‌ 

The

expense

ratio

shown

is

as

of

the

fund’s

most

recent

prospectus.

This

number

may

vary

from

the

expense

ratio

shown

elsewhere

in

this

report

because

it

is

based

on

a

different

time

period

and,

if

applicable,

includes

acquired

fund

fees

and

expenses

but

does

not

include

fee

or

expense

waivers.

T.

ROWE

PRICE

Capital

Appreciation

Fund

20

Note:

T.

Rowe

Price

charges

an

annual

account

service

fee

of

$20,

generally

for

accounts

with

less

than

$10,000.

The

fee

is

waived

for

any

investor

whose

T.

Rowe

Price

mutual

fund

accounts

total

$50,000

or

more;

accounts

electing

to

receive

electronic

delivery

of

account

statements,

transaction

confirmations,

prospectuses,

and

shareholder

reports;

or

accounts

of

an

investor

who

is

a

T.

Rowe

Price

Personal

Services

or

Enhanced

Personal

Services

client

(enrollment

in

these

programs

generally

requires

T.

Rowe

Price

assets

of

at

least

$250,000).

This

fee

is

not

included

in

the

accompanying

table.

If

you

are

subject

to

the

fee,

keep

it

in

mind

when

you

are

estimating

the

ongoing

expenses

of

investing

in

the

fund

and

when

comparing

the

expenses

of

this

fund

with

other

funds.

You

should

also

be

aware

that

the

expenses

shown

in

the

table

highlight

only

your

ongoing

costs

and

do

not

reflect

any

transaction

costs,

such

as

redemption

fees

or

sales

loads.

Therefore,

the

second

line

of

the

table

is

useful

in

comparing

ongoing

costs

only

and

will

not

help

you

determine

the

relative

total

costs

of

owning

different

funds.

To

the

extent

a

fund

charges

transaction

costs,

however,

the

total

cost

of

owning

that

fund

is

higher.

CAPITAL

APPRECIATION

FUND

Beginning

Account

Value

7/1/22

Ending

Account

Value

12/31/22

Expenses

Paid

During

Period*

7/1/22

to

12/31/22

Investor

Class

Actual

$1,000.00

$1,027.70

$3.63

Hypothetical

(assumes

5%

return

before

expenses)

 1,000.00

  1,021.63

  3.62

Advisor

Class

Actual

  1,000.00

  1,026.20

  4.95

Hypothetical

(assumes

5%

return

before

expenses)

 1,000.00

  1,020.32

  4.94

I

Class

Actual

  1,000.00

  1,028.10

  2.96

Hypothetical

(assumes

5%

return

before

expenses)

 1,000.00

  1,022.28

  2.96

*

Expenses

are

equal

to

the

fund’s

annualized

expense

ratio

for

the

6-month

period,

multiplied

by

the

average

account

value

over

the

period,

multiplied

by

the

number

of

days

in

the

most

recent

fiscal

half

year

(184),

and

divided

by

the

days

in

the

year

(365)

to

reflect

the

half-year

period.

The

annualized

expense

ratio

of

the

1

Investor

Class

was

0.71%,

the

2

Advisor Class

was

0.97%,

and

the

3

I Class

was

0.58%.

FUND

EXPENSE

EXAMPLE

(CONTINUED)

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

21

For

a

share

outstanding

throughout

each

period

Investor

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

NET

ASSET

VALUE

Beginning

of

period

$

36

.96‌

$

34

.11‌

$

31

.22‌

$

26

.53‌

$

28

.28‌

Investment

activities

Net

investment

income

(1)(2)

0

.49‌

0

.35‌

0

.40‌

0

.49‌

0

.72‌

(3)

Net

realized

and

unrealized

gain/

loss

(

4

.91‌

)

5

.91‌

5

.21‌

6

.02‌

(

0

.49‌

)

Total

from

investment

activities

(

4

.42‌

)

6

.26‌

5

.61‌

6

.51‌

0

.23‌

Distributions

Net

investment

income

(

0

.47‌

)

(

0

.35‌

)

(

0

.40‌

)

(

0

.48‌

)

(

0

.67‌

)

Net

realized

gain

(

2

.34‌

)

(

3

.06‌

)

(

2

.32‌

)

(

1

.34‌

)

(

1

.31‌

)

Total

distributions

(

2

.81‌

)

(

3

.41‌

)

(

2

.72‌

)

(

1

.82‌

)

(

1

.98‌

)

NET

ASSET

VALUE

End

of

period

$

29

.73‌

$

36

.96‌

$

34

.11‌

$

31

.22‌

$

26

.53‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

22

For

a

share

outstanding

throughout

each

period

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Investor

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

Ratios/Supplemental

Data

Total

return

(2)(4)

(

11

.94‌

)

%

18

.53‌

%

18

.16‌

%

24

.61‌

%

0

.62‌

%

Ratios

to

average

net

assets:

(2)

Gross

expenses

before

waivers/

payments

by

Price

Associates

(5)

0

.73‌

%

0

.70‌

%

0

.70‌

%

0

.70‌

%

0

.71‌

%

Net

expenses

after

waivers/

payments

by

Price

Associates

0

.71‌

%

0

.68‌

%

0

.69‌

%

0

.70‌

%

0

.71‌

%

Net

investment

income

1

.45‌

%

0

.95‌

%

1

.26‌

%

1

.61‌

%

2

.49‌

%

(3)

Portfolio

turnover

rate

83

.9‌

%

47

.8‌

%

87

.3‌

%

44

.8‌

%

65

.2‌

%

Net

assets,

end

of

period

(in

millions)

$26,104

$40,460

$35,253

$30,822

$24,535

0‌

%

0‌

%

0‌

%

0‌

%

0‌

%

(1)

Per

share

amounts

calculated

using

average

shares

outstanding

method.

(2)

See

Note

7

for

details

of

expense-related

arrangements

with

Price

Associates.

(3)

Reflects

a

special

dividend

which

amounted

to

$0.29

per

share

and

1.00%

of

average

net

assets.

(4)

Total

return

reflects

the

rate

that

an

investor

would

have

earned

on

an

investment

in

the

fund

during

each

period,

assuming

reinvestment

of

all

distributions,

and

payment

of

no

redemption

or

account

fees,

if

applicable.

(5)

See

Note

7

.

Prior

to

12/31/19,

the

gross

expense

ratios

presented

are

net

of

a

management

fee

waiver

in

effect

during

the

period,

as

applicable.

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

23

For

a

share

outstanding

throughout

each

period

Advisor

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

NET

ASSET

VALUE

Beginning

of

period

$

36

.49‌

$

33

.70‌

$

30

.88‌

$

26

.27‌

$

27

.99‌

Investment

activities

Net

investment

income

(1)(2)

0

.40‌

0

.24‌

0

.31‌

0

.40‌

0

.63‌

(3)

Net

realized

and

unrealized

gain/

loss

(

4

.85‌

)

5

.84‌

5

.13‌

5

.94‌

(

0

.47‌

)

Total

from

investment

activities

(

4

.45‌

)

6

.08‌

5

.44‌

6

.34‌

0

.16‌

Distributions

Net

investment

income

(

0

.40‌

)

(

0

.23‌

)

(

0

.30‌

)

(

0

.39‌

)

(

0

.57‌

)

Net

realized

gain

(

2

.34‌

)

(

3

.06‌

)

(

2

.32‌

)

(

1

.34‌

)

(

1

.31‌

)

Total

distributions

(

2

.74‌

)

(

3

.29‌

)

(

2

.62‌

)

(

1

.73‌

)

(

1

.88‌

)

NET

ASSET

VALUE

End

of

period

$

29

.30‌

$

36

.49‌

$

33

.70‌

$

30

.88‌

$

26

.27‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

24

For

a

share

outstanding

throughout

each

period

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Advisor

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

Ratios/Supplemental

Data

Total

return

(2)(4)

(

12

.18‌

)

%

18

.22‌

%

17

.80‌

%

24

.20‌

%

0

.38‌

%

Ratios

to

average

net

assets:

(2)

Gross

expenses

before

waivers/

payments

by

Price

Associates

(5)

0

.99‌

%

0

.99‌

%

1

.00‌

%

0

.99‌

%

1

.00‌

%

Net

expenses

after

waivers/

payments

by

Price

Associates

0

.97‌

%

0

.97‌

%

0

.99‌

%

0

.99‌

%

1

.00‌

%

Net

investment

income

1

.22‌

%

0

.66‌

%

0

.97‌

%

1

.32‌

%

2

.20‌

%

(3)

Portfolio

turnover

rate

83

.9‌

%

47

.8‌

%

87

.3‌

%

44

.8‌

%

65

.2‌

%

Net

assets,

end

of

period

(in

millions)

$654

$795

$770

$866

$788

0‌

%

0‌

%

0‌

%

0‌

%

0‌

%

(1)

Per

share

amounts

calculated

using

average

shares

outstanding

method.

(2)

See

Note

7

for

details

of

expense-related

arrangements

with

Price

Associates.

(3)

Reflects

a

special

dividend

which

amounted

to

$0.29

per

share

and

1.02%

of

average

net

assets.

(4)

Total

return

reflects

the

rate

that

an

investor

would

have

earned

on

an

investment

in

the

fund

during

each

period,

assuming

reinvestment

of

all

distributions,

and

payment

of

no

redemption

or

account

fees,

if

applicable.

(5)

See

Note

7

.

Prior

to

12/31/19,

the

gross

expense

ratios

presented

are

net

of

a

management

fee

waiver

in

effect

during

the

period,

as

applicable.

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

25

For

a

share

outstanding

throughout

each

period

I

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

NET

ASSET

VALUE

Beginning

of

period

$

36

.99‌

$

34

.14‌

$

31

.24‌

$

26

.55‌

$

28

.29‌

Investment

activities

Net

investment

income

(1)(2)

0

.56‌

0

.40‌

0

.44‌

0

.52‌

0

.77‌

(3)

Net

realized

and

unrealized

gain/

loss

(

4

.95‌

)

5

.91‌

5

.22‌

6

.02‌

(

0

.50‌

)

Total

from

investment

activities

(

4

.39‌

)

6

.31‌

5

.66‌

6

.54‌

0

.27‌

Distributions

Net

investment

income

(

0

.54‌

)

(

0

.40‌

)

(

0

.44‌

)

(

0

.51‌

)

(

0

.70‌

)

Net

realized

gain

(

2

.34‌

)

(

3

.06‌

)

(

2

.32‌

)

(

1

.34‌

)

(

1

.31‌

)

Total

distributions

(

2

.88‌

)

(

3

.46‌

)

(

2

.76‌

)

(

1

.85‌

)

(

2

.01‌

)

NET

ASSET

VALUE

End

of

period

$

29

.72‌

$

36

.99‌

$

34

.14‌

$

31

.24‌

$

26

.55‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Financial

Highlights

26

For

a

share

outstanding

throughout

each

period

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

I

Class

..

Year

..

..

Ended

.

12/31/22

12/31/21

12/31/20

12/31/19

12/31/18

Ratios/Supplemental

Data

Total

return

(2)(4)

(

11

.84‌

)

%

18

.67‌

%

18

.31‌

%

24

.70‌

%

0

.76‌

%

Ratios

to

average

net

assets:

(2)

Gross

expenses

before

waivers/

payments

by

Price

Associates

(5)

0

.60‌

%

0

.59‌

%

0

.59‌

%

0

.60‌

%

0

.59‌

%

Net

expenses

after

waivers/

payments

by

Price

Associates

0

.58‌

%

0

.57‌

%

0

.58‌

%

0

.59‌

%

0

.59‌

%

Net

investment

income

1

.67‌

%

1

.06‌

%

1

.37‌

%

1

.70‌

%

2

.65‌

%

(3)

Portfolio

turnover

rate

83

.9‌

%

47

.8‌

%

87

.3‌

%

44

.8‌

%

65

.2‌

%

Net

assets,

end

of

period

(in

millions)

$18,698

$12,654

$8,901

$6,246

$3,696

0‌

%

0‌

%

0‌

%

0‌

%

0‌

%

(1)

Per

share

amounts

calculated

using

average

shares

outstanding

method.

(2)

See

Note

7

for

details

of

expense-related

arrangements

with

Price

Associates.

(3)

Reflects

a

special

dividend

which

amounted

to

$0.30

per

share

and

1.04%

of

average

net

assets.

(4)

Total

return

reflects

the

rate

that

an

investor

would

have

earned

on

an

investment

in

the

fund

during

each

period,

assuming

reinvestment

of

all

distributions,

and

payment

of

no

redemption

or

account

fees,

if

applicable.

(5)

See

Note

7

.

Prior

to

12/31/19,

the

gross

expense

ratios

presented

are

net

of

a

management

fee

waiver

in

effect

during

the

period,

as

applicable.

T.

ROWE

PRICE

Capital

Appreciation

Fund

December

31,

2022

27

Portfolio

of

Investments

‡

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

ASSET-BACKED

SECURITIES

0.2%

Domino's

Pizza

Master

Issuer

Series 2017-1A,

Class

A23

4.118%,

7/25/47  (1)

38,742,938‌

35,505‌

Domino's

Pizza

Master

Issuer

Series 2018-1A,

Class

A2I

4.116%,

7/25/48  (1)

33,940,800‌

32,128‌

Domino's

Pizza

Master

Issuer

Series 2019-1A,

Class

A2

3.668%,

10/25/49  (1)

18,064,188‌

15,604‌

Total

Asset-Backed

Securities

(Cost

$90,426)

83,237‌

BANK

LOANS

12.9%

(2)

Acrisure,

FRN

1M

USD

LIBOR

+

3.75%,

8.134%,

2/15/27 

25,235,563‌

23,919‌

ADMI,

FRN

1M

USD

LIBOR

+

3.38%,

7.759%,

12/23/27 

56,965,295‌

51,525‌

ADMI,

FRN

1M

USD

LIBOR

+

3.75%,

8.134%,

12/23/27  (3)

135,650,910‌

123,189‌

ADMI,

FRN

3M

USD

LIBOR

+

3.00%,

4/30/25  (3)

16,873,615‌

15,848‌

Alliant

Holdings

Intermediate,

FRN

1M

USD

LIBOR

+

3.25%,

7.634%,

5/9/25  (3)

154,987,601‌

152,779‌

Alliant

Holdings

Intermediate,

FRN

1M

USD

LIBOR

+

3.25%,

7.634%,

5/9/25  (3)

75,025,227‌

73,967‌

Alliant

Holdings

Intermediate,

FRN

1M

USD

LIBOR

+

3.50%,

7.439%,

11/5/27  (3)

194,093,133‌

189,448‌

Applied

Systems,

FRN

1M

TSFR

+

4.50%,

9.08%,

9/18/26  (3)

235,698,421‌

234,617‌

Applied

Systems,

FRN

1M

USD

LIBOR

+

6.75%,

11.33%,

9/19/25  (3)

41,230,514‌

40,767‌

Ascend

Learning,

FRN

1M

USD

LIBOR

+

3.50%,

7.884%,

12/11/28 

170,114,629‌

160,546‌

AthenaHealth

Group,

FRN

1M

TSFR

+

3.50%,

7.349%,

2/15/29  (4)

192,224,641‌

173,072‌

Avantor

Funding,

FRN

1M

USD

LIBOR

+

2.25%,

6.634%,

11/8/27  (3)

40,064,952‌

39,820‌

Azalea

Topco,

FRN

1M

TSFR

+

3.75%,

8.173%,

7/24/26 

26,089,546‌

23,872‌

Azalea

Topco,

FRN

1M

USD

LIBOR

+

3.50%,

7.884%,

7/24/26 

142,896,095‌

130,571‌

Azalea

Topco,

FRN

1M

USD

LIBOR

+

3.75%,

8.134%,

7/24/26  (3)

39,969,625‌

36,639‌

Camelot

U.S.

Acquisition,

FRN

1M

USD

LIBOR

+

3.00%,

7.384%,

10/30/26 

22,618,700‌

22,251‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

28

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

Charter

Communications

Operating,

FRN

1M

USD

LIBOR

+

1.75%,

6.14%,

4/30/25 

22,860,311‌

22,707‌

CoreLogic,

FRN

1M

USD

LIBOR

+

6.50%,

10.938%,

6/4/29 

5,985,000‌

4,192‌

Eyecare

Partners,

FRN

1M

TSFR

+

3.75%,

8.48%,

2/18/27 

9,928,363‌

7,910‌

Eyecare

Partners,

FRN

1M

TSFR

+

3.75%,

8.48%,

11/15/28 

4,841,602‌

4,060‌

Filtration

Group,

FRN

1M

USD

LIBOR

+

3.50%,

7.884%,

10/21/28  (3)

59,545,935‌

58,355‌

Filtration

Group,

FRN

3M

EURIBOR

+

3.50%,

5.398%,

3/31/25

(EUR) 

50,688,540‌

52,316‌

Filtration

Group,

FRN

3M

USD

LIBOR

+

3.00%,

7.384%,

3/31/25  (3)

74,496,260‌

73,596‌

Heartland

Dental,

FRN

1M

USD

LIBOR

+

4.00%,

8.387%,

4/30/25 

20,396,751‌

18,918‌

Heartland

Dental,

FRN

3M

USD

LIBOR

+

3.75%,

8.134%,

4/30/25 

168,692,519‌

155,534‌

Hilton

Worldwide

Finance,

FRN

1M

USD

LIBOR

+

1.75%,

6.173%,

6/22/26  (3)

21,002,377‌

20,919‌

Howden

Group

Holdings,

FRN

1M

USD

LIBOR

+

3.25%,

7.688%,

11/12/27 

163,805,254‌

159,271‌

HUB

International,

FRN

1M

TSFR

+

4.00%,

8.22%,

11/10/29 

44,788,823‌

44,254‌

HUB

International,

FRN

1M

USD

LIBOR

+

3.25%,

7.528%,

4/25/25 

520,951,529‌

515,622‌

HUB

International,

FRN

3M

USD

LIBOR

+

3.00%,

7.327%,

4/25/25 

767,567,336‌

758,295‌

IRB

Holding,

FRN

1M

TSFR

+

3.00%,

7.317%,

12/15/27 

67,092,611‌

65,029‌

IRB

Holding,

FRN

1M

USD

LIBOR

+

2.75%,

7.134%,

2/5/25  (3)

68,221,758‌

67,529‌

Life

Time,

FRN

1M

USD

LIBOR

+

4.75%,

9.485%,

12/16/24 

19,802,638‌

19,673‌

Loire

Finco

Luxembourg,

FRN

1M

USD

LIBOR

+

3.00%,

7.384%,

4/21/27  (3)

109,846,058‌

102,294‌

Loire

Finco

Luxembourg,

FRN

1M

USD

LIBOR

+

3.50%,

7.884%,

4/21/27 

6,709,342‌

6,251‌

Medline

Borrower,

FRN

1M

USD

LIBOR

+

3.25%,

7.634%,

10/23/28 

346,660,916‌

328,974‌

Mileage

Plus

Holdings,

FRN

1M

USD

LIBOR

+

5.25%,

9.996%,

6/21/27  (3)

218,759,574‌

224,721‌

PetVet

Care

Centers,

FRN

1M

USD

LIBOR

+

3.50%,

7.884%,

2/14/25 

74,252,584‌

69,578‌

PetVet

Care

Centers,

FRN

3M

USD

LIBOR

+

2.75%,

7.134%,

2/14/25 

11,463,917‌

10,669‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

29

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

PetVet

Care

Centers,

FRN

3M

USD

LIBOR

+

3.25%,

7.634%,

2/14/25 

48,633,636‌

45,366‌

PetVet

Care

Centers,

FRN

3M

USD

LIBOR

+

6.25%,

10.634%,

2/13/26 

3,982,000‌

3,660‌

RealPage,

FRN

1M

USD

LIBOR

+

3.00%,

7.384%,

4/24/28 

185,409,820‌

175,954‌

RealPage,

FRN

1M

USD

LIBOR

+

6.50%,

10.884%,

4/23/29 

6,300,000‌

6,032‌

Ryan

Specialty

Group,

FRN

1M

TSFR

+

3.00%,

7.423%,

9/1/27 

36,751,819‌

36,446‌

SBA

Senior

Finance

II,

FRN

1M

USD

LIBOR

+

1.75%,

6.14%,

4/11/25  (3)

11,060,169‌

11,011‌

SeaWorld

Parks

&

Entertainment,

FRN

1M

USD

LIBOR

+

3.00%,

7.438%,

8/25/28 

5,972,792‌

5,857‌

SkyMiles

IP,

FRN

3M

USD

LIBOR

+

3.75%,

6.46%,

10/20/27  (3)

56,961,329‌

57,986‌

Sophia,

FRN

1M

TSFR

+

4.25%,

8.573%,

10/7/27  (3)

16,504,064‌

16,009‌

Sophia,

FRN

1M

USD

LIBOR

+

3.50%,

8.23%,

10/7/27  (3)

36,736,747‌

35,382‌

Storable,

FRN

1M

TSFR

+

3.50%,

7.978%,

4/17/28 

9,405,000‌

8,935‌

Sunshine

Luxembourg

VII,

FRN

1M

USD

LIBOR

+

3.75%,

8.48%,

10/1/26 

118,627,443‌

113,421‌

TK

Elevator

U.S.

Newco,

FRN

6M

USD

LIBOR

+

3.50%,

6.871%,

7/30/27 

72,710,691‌

69,848‌

UKG,

FRN

1M

USD

LIBOR

+

3.25%,

6.998%,

5/4/26 

638,573,594‌

606,645‌

UKG,

FRN

1M

USD

LIBOR

+

5.25%,

8.998%,

5/3/27 

32,910,000‌

30,129‌

USI,

FRN

1M

TSFR

+

3.25%,

7.98%,

12/2/26  (3)

183,612,613‌

182,006‌

USI,

FRN

1M

TSFR

+

3.75%,

8.33%,

11/22/29 

165,840,969‌

164,065‌

Woof

Holdings,

FRN

1M

USD

LIBOR

+

3.75%,

8.104%,

12/21/27 

18,412,050‌

17,277‌

Total

Bank

Loans

(Cost

$6,046,321)

5,869,526‌

BOND

MUTUAL

FUNDS

1.6%

T.

Rowe

Price

Institutional

Floating

Rate

Fund

–

Institutional

Class,

7.57%  (5)(6)

81,623,366‌

749,303‌

Total

Bond

Mutual

Funds

(Cost

$791,539)

749,303‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

30

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

COMMON

STOCKS

61.9%

COMMUNICATION

SERVICES

1.8%

Interactive

Media

&

Services

1.8%

Alphabet,

Class

A  (7)(8)

7,392,840‌

652,270‌

Meta

Platforms,

Class

A  (7)

1,421,485‌

171,062‌

Total

Communication

Services

823,332‌

CONSUMER

DISCRETIONARY

4.7%

Auto

Components

0.1%

Mobileye

Global,

Class

A  (7)

771,493‌

27,049‌

27,049‌

Hotels,

Restaurants

&

Leisure

2.5%

Starbucks (8)

2,365,800‌

234,687‌

Yum!

Brands  (8)

6,963,386‌

891,871‌

1,126,558‌

Internet

&

Direct

Marketing

Retail

2.1%

Amazon.com (7)(8)

11,249,700‌

944,975‌

944,975‌

Total

Consumer

Discretionary

2,098,582‌

CONSUMER

STAPLES

0.3%

Beverages

0.3%

Keurig

Dr

Pepper  (8)

4,286,745‌

152,865‌

Total

Consumer

Staples

152,865‌

ENERGY

1.6%

Oil,

Gas

&

Consumable

Fuels

1.6%

ConocoPhillips 

995,648‌

117,487‌

EOG

Resources 

3,247,405‌

420,604‌

Pioneer

Natural

Resources 

888,700‌

202,970‌

Total

Energy

741,061‌

FINANCIALS

6.8%

Banks

2.9%

PNC

Financial

Services

Group  (8)

8,306,093‌

1,311,864‌

1,311,864‌

Capital

Markets

3.2%

Intercontinental

Exchange 

8,304,785‌

851,988‌

KKR 

8,171,371‌

379,315‌

MSCI 

139,154‌

64,730‌

S&P

Global 

442,390‌

148,174‌

1,444,207‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

31

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

Insurance

0.7%

Marsh

&

McLennan 

2,049,018‌

339,071‌

339,071‌

Total

Financials

3,095,142‌

HEALTH

CARE

13.0%

Health

Care

Equipment

&

Supplies

3.5%

Alcon

(CHF) 

6,965,090‌

477,937‌

Becton

Dickinson

&

Company 

2,270,944‌

577,501‌

Teleflex 

2,087,469‌

521,095‌

1,576,533‌

Health

Care

Providers

&

Services

2.0%

UnitedHealth

Group  (8)

1,693,153‌

897,676‌

897,676‌

Health

Care

Technology

0.1%

GE

HealthCare

Technologies  (7)(9)

1,037,059‌

60,543‌

60,543‌

Life

Sciences

Tools

&

Services

6.5%

Avantor (7)

25,653,194‌

541,026‌

Danaher 

2,707,794‌

718,703‌

PerkinElmer 

5,868,147‌

822,831‌

Thermo

Fisher

Scientific  (8)

1,548,504‌

852,746‌

2,935,306‌

Pharmaceuticals

0.9%

Catalent (7)

2,807,132‌

126,349‌

Eli

Lilly 

773,500‌

282,977‌

409,326‌

Total

Health

Care

5,879,384‌

INDUSTRIALS

&

BUSINESS

SERVICES

10.4%

Commercial

Services

&

Supplies

1.4%

Aurora

Innovation  (7)

34,667,381‌

41,948‌

Waste

Connections 

4,439,653‌

588,520‌

630,468‌

Industrial

Conglomerates

2.9%

General

Electric  (8)

9,298,452‌

779,117‌

Roper

Technologies 

1,291,022‌

557,838‌

1,336,955‌

Machinery

3.5%

Fortive 

13,819,498‌

887,903‌

Ingersoll

Rand 

13,620,570‌

711,675‌

1,599,578‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

32

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

Professional

Services

2.6%

Equifax 

3,106,947‌

603,866‌

TransUnion  (5)

10,150,553‌

576,044‌

1,179,910‌

Total

Industrials

&

Business

Services

4,746,911‌

INFORMATION

TECHNOLOGY

16.3%

Electronic

Equipment,

Instruments

&

Components

2.6%

TE

Connectivity  (8)

5,841,845‌

670,644‌

Teledyne

Technologies  (7)

1,324,093‌

529,518‌

1,200,162‌

IT

Services

1.4%

Mastercard,

Class

A 

965,000‌

335,559‌

Visa,

Class

A 

1,385,400‌

287,831‌

623,390‌

Semiconductors

&

Semiconductor

Equipment

3.8%

NVIDIA 

1,885,000‌

275,474‌

NXP

Semiconductors 

5,153,173‌

814,356‌

Texas

Instruments 

3,912,129‌

646,362‌

1,736,192‌

Software

6.1%

Microsoft (8)

9,922,427‌

2,379,597‌

Salesforce  (7)

3,022,348‌

400,733‌

2,780,330‌

Technology

Hardware,

Storage

&

Peripherals

2.4%

Apple (8)

8,505,614‌

1,105,134‌

1,105,134‌

Total

Information

Technology

7,445,208‌

MATERIALS

1.0%

Chemicals

1.0%

Linde 

1,360,722‌

443,840‌

Total

Materials

443,840‌

UTILITIES

2.7%

Electric

Utilities

0.8%

Xcel

Energy 

5,227,400‌

366,493‌

366,493‌

Multi-Utilities

1.9%

Ameren 

7,512,144‌

667,980‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

33

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

Public

Service

Enterprise

Group 

2,857,600‌

175,085‌

843,065‌

Total

Utilities

1,209,558‌

Total

Miscellaneous

Common

Stocks

 3.3%  (10)

1,500,950‌

Total

Common

Stocks

(Cost

$23,003,936)

28,136,833‌

CONVERTIBLE

BONDS

0.1%

Spotify

USA,

Zero

Coupon,

3/15/26 

44,593,000‌

36,086‌

Total

Convertible

Bonds

(Cost

$39,179)

36,086‌

CONVERTIBLE

PREFERRED

STOCKS

0.2%

INFORMATION

TECHNOLOGY

0.2%

Software

0.2%

Waymo,

Series

A-2,

Acquisition

Date:

5/8/20,

Cost $183,922  (7)

(11)(12)

2,141,932‌

101,057‌

Waymo,

Series

B-2,

Acquisition

Date:

6/11/21,

Cost $16,282  (7)

(11)(12)

177,514‌

8,375‌

Total

Information

Technology

109,432‌

Total

Convertible

Preferred

Stocks

(Cost

$200,204)

109,432‌

CORPORATE

BONDS

8.2%

Acrisure,

7.00%,

11/15/25  (1)

76,025,000‌

69,943‌

Alliant

Holdings

Intermediate,

4.25%,

10/15/27  (1)

14,533,000‌

13,043‌

Alliant

Holdings

Intermediate,

5.875%,

11/1/29  (1)

22,668,000‌

18,588‌

Alliant

Holdings

Intermediate,

6.75%,

10/15/27  (1)

74,350,000‌

66,822‌

Altice

France

Holding,

10.50%,

5/15/27  (1)

56,255,000‌

42,754‌

AmWINS

Group,

4.875%,

6/30/29  (1)

20,805,000‌

17,814‌

Arches

Buyer,

4.25%,

6/1/28  (1)

300,000‌

234‌

Avantor

Funding,

3.875%,

11/1/29  (1)

62,293,000‌

52,248‌

Avantor

Funding,

4.625%,

7/15/28  (1)

89,838,000‌

81,640‌

Black

Knight

InfoServ,

3.625%,

9/1/28  (1)

10,398,000‌

9,020‌

Booz

Allen

Hamilton,

3.875%,

9/1/28  (1)

13,089,000‌

11,600‌

Booz

Allen

Hamilton,

4.00%,

7/1/29  (1)

1,602,000‌

1,412‌

BroadStreet

Partners,

5.875%,

4/15/29  (1)

7,405,000‌

6,331‌

CCO

Holdings,

5.00%,

2/1/28  (1)

252,238,000‌

227,014‌

CCO

Holdings,

5.125%,

5/1/27  (1)

321,632,000‌

296,303‌

CCO

Holdings,

5.50%,

5/1/26  (1)

12,750,000‌

12,336‌

Cedar

Fair,

5.25%,

7/15/29 

75,398,000‌

67,670‌

Cedar

Fair,

5.375%,

4/15/27 

95,041,000‌

90,408‌

Cedar

Fair,

5.50%,

5/1/25  (1)

59,601,000‌

58,707‌

Cedar

Fair,

6.50%,

10/1/28 

64,276,000‌

61,625‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

34

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

Charles

River

Laboratories

International,

3.75%,

3/15/29  (1)

23,081,000‌

20,311‌

Charles

River

Laboratories

International,

4.00%,

3/15/31  (1)

14,433,000‌

12,521‌

Charles

River

Laboratories

International,

4.25%,

5/1/28  (1)

6,559,000‌

6,002‌

Clarios

Global,

6.25%,

5/15/26  (1)

21,486,000‌

21,003‌

Clarios

Global,

6.75%,

5/15/25  (1)

15,558,000‌

15,616‌

Clarios

Global,

8.50%,

5/15/27  (1)

76,610,000‌

74,886‌

Clarivate

Science

Holdings,

3.875%,

7/1/28  (1)

10,532,000‌

8,979‌

Clarivate

Science

Holdings,

4.875%,

7/1/29  (1)

7,515,000‌

6,369‌

Crowdstrike

Holdings,

3.00%,

2/15/29 

2,555,000‌

2,152‌

Delta

Air

Lines,

4.75%,

10/20/28  (1)

37,425,000‌

35,138‌

Entegris

Escrow,

4.75%,

4/15/29  (1)

17,728,000‌

16,066‌

Gartner,

3.625%,

6/15/29  (1)

29,541,000‌

25,885‌

Gartner,

3.75%,

10/1/30  (1)

12,944,000‌

11,148‌

Gartner,

4.50%,

7/1/28  (1)

6,360,000‌

5,915‌

General

Electric,

Series D,

FRN,

3M

USD

LIBOR

+

3.33%,

8.099%  (13)

148,338,000‌

147,040‌

Hadrian

Merger

Sub,

8.50%,

5/1/26  (1)

65,911,000‌

57,343‌

Hilton

Domestic

Operating,

3.625%,

2/15/32  (1)

37,792,000‌

30,281‌

Hilton

Domestic

Operating,

3.75%,

5/1/29  (1)

20,727,000‌

17,929‌

Hilton

Domestic

Operating,

4.00%,

5/1/31  (1)

28,046,000‌

23,558‌

Hilton

Domestic

Operating,

4.875%,

1/15/30 

28,043,000‌

25,344‌

Hilton

Domestic

Operating,

5.375%,

5/1/25  (1)

10,803,000‌

10,668‌

Hilton

Domestic

Operating,

5.75%,

5/1/28  (1)

7,941,000‌

7,683‌

Hilton

Worldwide

Finance,

4.875%,

4/1/27 

14,587,000‌

13,876‌

Hologic,

3.25%,

2/15/29  (1)

23,573,000‌

20,273‌

Howmet

Aerospace,

3.00%,

1/15/29 

21,568,000‌

18,603‌

Howmet

Aerospace,

5.90%,

2/1/27 

3,203,000‌

3,203‌

HUB

International,

5.625%,

12/1/29  (1)

17,893,000‌

15,656‌

HUB

International,

7.00%,

5/1/26  (1)

306,293,000‌

299,784‌

Intercontinental

Exchange,

4.00%,

9/15/27 

6,439,000‌

6,221‌

Intercontinental

Exchange,

4.35%,

6/15/29 

21,763,000‌

21,041‌

Intercontinental

Exchange,

5.20%,

6/15/62 

43,315,000‌

40,867‌

IQVIA,

5.00%,

5/15/27  (1)

14,625,000‌

13,857‌

KFC

Holding,

4.75%,

6/1/27  (1)

135,551,000‌

130,129‌

Korn

Ferry,

4.625%,

12/15/27  (1)

11,955,000‌

10,969‌

Lamar

Media,

3.625%,

1/15/31 

4,650,000‌

3,813‌

Lamar

Media,

3.75%,

2/15/28 

26,928,000‌

24,033‌

Lennox

International,

3.00%,

11/15/23 

6,420,000‌

6,298‌

Life

Time,

5.75%,

1/15/26  (1)

52,089,000‌

48,182‌

Live

Nation

Entertainment,

4.875%,

11/1/24  (1)

3,645,000‌

3,531‌

Mattel,

3.375%,

4/1/26  (1)

7,552,000‌

6,920‌

Mattel,

3.75%,

4/1/29  (1)

16,096,000‌

14,084‌

Mattel,

5.875%,

12/15/27  (1)

5,795,000‌

5,657‌

Mileage

Plus

Holdings,

6.50%,

6/20/27  (1)

35,507,288‌

35,108‌

Mirant,

EC,

7.90%,

7/15/09  (1)(7)(11)

16,000,000‌

—‌

MSCI,

3.25%,

8/15/33  (1)

17,534,000‌

13,545‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

35

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

MSCI,

3.625%,

9/1/30  (1)

45,782,000‌

37,999‌

MSCI,

3.625%,

11/1/31  (1)

19,344,000‌

16,055‌

MSCI,

3.875%,

2/15/31  (1)

23,764,000‌

19,694‌

MSCI,

4.00%,

11/15/29  (1)

31,775,000‌

27,724‌

NiSource,

VR,

5.65%  (13)(14)

20,039,000‌

18,636‌

PRA

Health

Sciences,

2.875%,

7/15/26  (1)

7,641,000‌

6,972‌

Ryan

Specialty

Group,

4.375%,

2/1/30  (1)

2,890,000‌

2,511‌

SBA

Communications,

3.125%,

2/1/29 

48,386,000‌

40,221‌

SBA

Communications,

3.875%,

2/15/27 

34,256,000‌

31,087‌

SBA

Tower

Trust,

6.599%,

1/15/28  (1)

2,575,000‌

2,579‌

Sensata

Technologies,

3.75%,

2/15/31  (1)

20,020,000‌

16,467‌

Sensata

Technologies,

4.00%,

4/15/29  (1)

37,430,000‌

32,283‌

Sensata

Technologies,

4.375%,

2/15/30  (1)

8,826,000‌

7,712‌

Sensata

Technologies,

5.00%,

10/1/25  (1)

23,800,000‌

23,086‌

Sensata

Technologies,

5.625%,

11/1/24  (1)

6,670,000‌

6,587‌

Sensata

Technologies,

5.875%,

9/1/30  (1)

10,247,000‌

9,683‌

Service

Corp.

International,

3.375%,

8/15/30 

25,751,000‌

20,923‌

Sirius

XM

Radio,

5.00%,

8/1/27  (1)

15,665,000‌

14,471‌

Six

Flags

Entertainment,

4.875%,

7/31/24  (1)

186,526,000‌

179,998‌

Six

Flags

Entertainment,

5.50%,

4/15/27  (1)

115,949,000‌

105,803‌

Six

Flags

Theme

Parks,

7.00%,

7/1/25  (1)

29,908,000‌

30,057‌

Surgery

Center

Holdings,

10.00%,

4/15/27  (1)

29,147,000‌

29,439‌

Teleflex,

4.25%,

6/1/28  (1)

5,425,000‌

4,991‌

Teleflex,

4.625%,

11/15/27 

31,460,000‌

29,808‌

TransDigm,

5.50%,

11/15/27 

27,161,000‌

25,260‌

TransDigm,

6.25%,

3/15/26  (1)

35,666,000‌

34,997‌

TransDigm,

6.375%,

6/15/26 

5,780,000‌

5,628‌

TransDigm

U.K.

Holdings,

6.875%,

5/15/26 

3,025,000‌

2,972‌

Twilio,

3.625%,

3/15/29 

1,215,000‌

986‌

U.S.

Airways

PTT,

Series 2010-1,

Class

A,

6.25%,

4/22/23 

4,170,556‌

4,087‌

U.S.

Airways

PTT,

Series 2012-2,

Class

A,

4.625%,

6/3/25 

822,229‌

744‌

U.S.

Airways

PTT,

Series 2013-1,

Class

A,

3.95%,

11/15/25 

4,866,607‌

4,435‌

United

Airlines

PTT,

Series 2012-1,

Class

A,

4.15%,

4/11/24 

7,813,296‌

7,563‌

USI,

6.875%,

5/1/25  (1)

119,087,000‌

116,557‌

Vail

Resorts,

6.25%,

5/15/25  (1)

10,632,000‌

10,632‌

Yum!

Brands,

3.625%,

3/15/31 

34,665,000‌

28,945‌

Yum!

Brands,

4.625%,

1/31/32 

70,819,000‌

62,675‌

Yum!

Brands,

4.75%,

1/15/30  (1)

23,469,000‌

21,533‌

Yum!

Brands,

5.35%,

11/1/43 

72,633,000‌

60,013‌

Yum!

Brands,

5.375%,

4/1/32 

54,315,000‌

50,241‌

Yum!

Brands,

6.875%,

11/15/37 

30,316,000‌

30,695‌

Total

Corporate

Bonds

(Cost

$3,907,363)

3,725,748‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

36

Shares/Par

$

Value

(Cost

and

value

in

$000s)

‡

PREFERRED

STOCKS

0.3%

FINANCIALS

0.0%

Financial

Services

0.0%

Charles

Schwab,

Series

D,

5.95%  (13)

95,800‌

2,260‌

Total

Financials

2,260‌

UTILITIES

0.3%

Electric

Utilities

0.3%

CMS

Energy,

5.875%,

10/15/78  (5)

2,242,179‌

49,731‌

CMS

Energy,

5.875%,

3/1/79  (5)

2,745,976‌

61,510‌

SCE

Trust

IV,

Series

J,

VR,

5.375%  (5)(13)(14)

1,637,355‌

29,636‌

140,877‌

Gas

&

Gas

Transmission

0.0%

NiSource,

Series

B,

VR,

6.50%  (13)(14)

514,812‌

12,505‌

12,505‌

Total

Utilities

153,382‌

Total

Preferred

Stocks

(Cost

$180,903)

155,642‌

U.S.

GOVERNMENT

AGENCY

OBLIGATIONS

(EXCLUDING

MORTGAGE-BACKED)

9.0%

U.S.

Treasury

Obligations

9.0%

U.S.

Treasury

Notes,

2.75%,

8/15/32 

4,473,285,900‌

4,068,593‌

4,068,593‌

Total

U.S.

Government

Agency

Obligations

(Excluding

Mortgage-Backed)

(Cost

$4,067,120)

4,068,593‌

SHORT-TERM

INVESTMENTS

6.0%

Money

Market

Funds

6.0%

T.

Rowe

Price

Government

Reserve

Fund,

4.30%  (5)(15)

2,714,515,328‌

2,714,515‌

Total

Short-Term

Investments

(Cost

$2,714,515)

2,714,515‌

Total

Investments

in

Securities

100.4%

of

Net

Assets

(Cost

$41,041,506)

$

45,648,915‌

‡

Shares/Par

and

Notional

Amount

are

denominated

in

U.S.

dollars

unless

otherwise

noted.

T.

ROWE

PRICE

Capital

Appreciation

Fund

37

.

.

.

.

.

.

.

.

.

.

(1)

Security

was

purchased

pursuant

to

Rule

144A

under

the

Securities

Act

of

1933

and

may

be

resold

in

transactions

exempt

from

registration

only

to

qualified

institutional

buyers.

Total

value

of

such

securities

at

period-end

amounts

to

$2,851,872

and

represents

6.3%

of

net

assets.

(2)

Bank

loan

positions

may

involve

multiple

underlying

tranches.

In

those

instances,

the

position

presented

reflects

the

aggregate

of

those

respective

underlying

tranches

and

the

rate

presented

reflects

the

weighted

average

rate

of

the

settled

positions.

(3)

All

or

a

portion

of

this

loan

is

unsettled

as

of

December

31,

2022.

The

interest

rate

for

unsettled

loans

will

be

determined

upon

settlement

after

period

end.

(4)

All

or

a

portion

of

the

position

represents

an

unfunded

commitment;

a

liability

to

fund

the

commitment

has

been

recognized.

The

fund's

total

unfunded

commitment

at

December

31,

2022,

was

$20,984

and

was

valued

at

$18,893

(0.0%

of

net

assets).

(5)

Affiliated

Companies

(6)

SEC

30-day

yield

(7)

Non-income

producing

(8)

All

or

a

portion

of

this

security

is

pledged

to

cover

or

as

collateral

for

written

call

options

at

December

31,

2022.

(9)

When-issued

security

(10)

The

identity

of

certain

securities

has

been

concealed

to

protect

the

fund

while

it

completes

a

purchase

or

selling

program

for

the

securities.

(11)

See

Note

2.

Level

3

in

fair

value

hierarchy.

(12)

Security

cannot

be

offered

for

public

resale

without

first

being

registered

under

the

Securities

Act

of

1933

and

related

rules

("restricted

security").

Acquisition

date

represents

the

day

on

which

an

enforceable

right

to

acquire

such

security

is

obtained

and

is

presented

along

with

related

cost

in

the

security

description.

The

fund

may

have

registration

rights

for

certain

restricted

securities.

Any

costs

related

to

such

registration

are

generally

borne

by

the

issuer.

The

aggregate

value

of

restricted

securities

(excluding

144A

holdings)

at

period

end

amounts

to

$109,432

and

represents

0.2%

of

net

assets.

(13)

Perpetual

security

with

no

stated

maturity

date.

(14)

Security

is

a

fix-to-float

security,

which

carries

a

fixed

coupon

until

a

certain

date,

upon

which

it

switches

to

a

floating

rate.

Reference

rate

and

spread

are

provided

if

the

rate

is

currently

floating.

(15)

Seven-day

yield

1M

TSFR

One

month

term

SOFR

(Secured

overnight

financing

rate)

1M

USD

LIBOR

One

month

USD

LIBOR

(London

interbank

offered

rate)

3M

EURIBOR

Three

month

EURIBOR

(Euro

interbank

offered

rate)

3M

USD

LIBOR

Three

month

USD

LIBOR

(London

interbank

offered

rate)

6M

USD

LIBOR

Six

month

USD

LIBOR

(London

interbank

offered

rate)

CHF

Swiss

Franc

EC

Escrow

CUSIP;

represents

a

beneficial

interest

in

a

residual

pool

of

assets;

the

amount

and

timing

of

future

distributions,

if

any,

is

uncertain;

when

presented,

interest

rate

and

maturity

date

are

those

of

the

original

security.

EUR

Euro

FRN

Floating

Rate

Note

T.

ROWE

PRICE

Capital

Appreciation

Fund

38

.

.

.

.

.

.

.

.

.

.

OTC

Over-the-counter

PTT

Pass-Through

Trust

VR

Variable

Rate;

rate

shown

is

effective

rate

at

period-end.

The

rates

for

certain

variable

rate

securities

are

not

based

on

a

published

reference

rate

and

spread

but

are

determined

by

the

issuer

or

agent

and

based

on

current

market

conditions.

T.

ROWE

PRICE

Capital

Appreciation

Fund

39

(Amounts

in

000s,

except

for

contracts)

OPTIONS

WRITTEN

(0.2)%

OTC

Options

Written

(0.2)%

Counterparty

Description

Contracts

Notional

Amount

$

Value

Goldman

Sachs

Alphabet,

Class

A,

Call,

1/20/23

@

$160.00

2,380

20,999

(1‌)

Goldman

Sachs

Alphabet,

Class

A,

Call,

1/20/23

@

$165.00

2,380

20,999

(1‌)

Goldman

Sachs

Alphabet,

Class

A,

Call,

1/20/23

@

$170.00

2,380

20,999

(1‌)

Goldman

Sachs

Alphabet,

Class

A,

Call,

1/20/23

@

$175.00

2,380

20,999

(1‌)

Wells

Fargo

Bank

Alphabet,

Class

A,

Call,

1/19/24

@

$120.00

11,767

103,820

(4,736‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$225.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$230.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$235.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$240.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$245.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$250.00

1,260

10,584

(1‌)

Citibank

Amazon.com,

Call,

1/20/23

@

$255.00

1,260

10,584

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$180.00

1,860

15,624

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$185.00

1,860

15,624

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$190.00

1,860

15,624

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$200.00

1,220

10,248

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$205.00

1,220

10,248

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$210.00

1,220

10,248

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$215.00

1,220

10,248

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$220.00

1,220

10,248

(1‌)

Goldman

Sachs

Amazon.com,

Call,

1/20/23

@

$225.00

1,220

10,248

(1‌)

T.

ROWE

PRICE

Capital

Appreciation

Fund

40

(Amounts

in

000s,

except

for

contracts)

Counterparty

Description

Contracts

Notional

Amount

$

Value

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$175.00

8,400

70,560

(4‌)

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$190.00

3,200

26,880

(2‌)

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$195.00

3,200

26,880

(2‌)

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$200.00

3,200

26,880

(2‌)

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$205.00

3,200

26,880

(2‌)

Wells

Fargo

Bank

Amazon.com,

Call,

1/20/23

@

$210.00

3,200

26,880

(2‌)

JPMorgan

Chase

Apple,

Call,

1/20/23

@

$170.00

5,100

66,264

(8‌)

JPMorgan

Chase

Apple,

Call,

1/20/23

@

$175.00

5,100

66,264

(8‌)

JPMorgan

Chase

Apple,

Call,

1/20/23

@

$180.00

5,100

66,264

(2‌)

Wells

Fargo

Bank

General

Electric,

Call,

1/20/23

@

$85.00

7,280

60,999

(1,401‌)

Wells

Fargo

Bank

General

Electric,

Call,

1/20/23

@

$90.00

7,280

60,999

(353‌)

Wells

Fargo

Bank

General

Electric,

Call,

1/20/23

@

$95.00

7,280

60,999

(69‌)

Wells

Fargo

Bank

General

Electric,

Call,

1/20/23

@

$110.00

9,609

80,514

(24‌)

Wells

Fargo

Bank

Hilton

Worldwide

Holdings,

Call,

1/19/24

@

$145.00

3,037

38,376

(3,690‌)

Wells

Fargo

Bank

Hilton

Worldwide

Holdings,

Call,

1/19/24

@

$150.00

3,037

38,376

(3,219‌)

Citibank

Keurig

Dr

Pepper,

Call,

1/20/23

@

$40.00

7,350

26,210

(18‌)

Citibank

Keurig

Dr

Pepper,

Call,

1/20/23

@

$42.00

7,350

26,210

(18‌)

Citibank

Microsoft,

Call,

1/20/23

@

$325.00

4,370

104,801

(2‌)

Citibank

Microsoft,

Call,

1/20/23

@

$330.00

2,142

51,369

(1‌)

Citibank

Microsoft,

Call,

1/20/23

@

$340.00

4,452

106,768

(2‌)

Citibank

Microsoft,

Call,

1/20/23

@

$350.00

4,452

106,768

(2‌)

Citibank

Microsoft,

Call,

1/20/23

@

$360.00

2,310

55,398

(1‌)

T.

ROWE

PRICE

Capital

Appreciation

Fund

41

(Amounts

in

000s,

except

for

contracts)

Counterparty

Description

Contracts

Notional

Amount

$

Value

Citibank

Microsoft,

Call,

1/20/23

@

$365.00

1,603

38,443

(1‌)

Credit

Suisse

Microsoft,

Call,

1/20/23

@

$320.00

2,277

54,607

(3‌)

Credit

Suisse

Microsoft,

Call,

1/20/23

@

$330.00

1,372

32,903

(1‌)

Credit

Suisse

Microsoft,

Call,

1/20/23

@

$340.00

1,372

32,903

(1‌)

Credit

Suisse

Microsoft,

Call,

1/20/23

@

$350.00

1,372

32,903

(1‌)

JPMorgan

Chase

Microsoft,

Call,

1/20/23

@

$350.00

2,320

55,638

(1‌)

JPMorgan

Chase

Microsoft,

Call,

1/20/23

@

$355.00

2,320

55,638

(1‌)

JPMorgan

Chase

Microsoft,

Call,

1/20/23

@

$360.00

2,321

55,662

(1‌)

JPMorgan

Chase

Microsoft,

Call,

1/19/24

@

$300.00

9,507

227,997

(11,741‌)

Susquehanna

Financial

Group

LLLP

Microsoft,

Call,

1/20/23

@

$330.00

905

21,704

—‌

Susquehanna

Financial

Group

LLLP

Microsoft,

Call,

1/20/23

@

$340.00

905

21,704

—‌

Susquehanna

Financial

Group

LLLP

Microsoft,

Call,

1/20/23

@

$350.00

905

21,704

—‌

Citibank

PNC

Financial

Services

Group,

Call,

1/20/23

@

$220.00

3,221

50,872

(16‌)

Citibank

PNC

Financial

Services

Group,

Call,

1/20/23

@

$230.00

3,221

50,873

(8‌)

JPMorgan

Chase

PNC

Financial

Services

Group,

Call,

1/20/23

@

$190.00

1,946

30,735

(24‌)

JPMorgan

Chase

PNC

Financial

Services

Group,

Call,

1/20/23

@

$195.00

1,946

30,735

(34‌)

JPMorgan

Chase

PNC

Financial

Services

Group,

Call,

1/20/23

@

$200.00

1,946

30,735

(24‌)

Goldman

Sachs

Starbucks,

Call,

1/20/23

@

$97.50

5,442

53,985

(2,013‌)

Goldman

Sachs

Starbucks,

Call,

1/20/23

@

$100.00

5,442

53,985

(1,219‌)

Goldman

Sachs

Starbucks,

Call,

1/20/23

@

$105.00

5,442

53,985

(321‌)

T.

ROWE

PRICE

Capital

Appreciation

Fund

42

(Amounts

in

000s,

except

for

contracts)

Counterparty

Description

Contracts

Notional

Amount

$

Value

Goldman

Sachs

Starbucks,

Call,

1/19/24

@

$100.00

3,666

36,367

(4,977‌)

Goldman

Sachs

Starbucks,

Call,

1/19/24

@

$105.00

3,666

36,367

(4,115‌)

JPMorgan

Chase

TE

Connectivity,

Call,

1/20/23

@

$120.00

5,810

66,699

(668‌)

Citibank

Thermo

Fisher

Scientific,

Call,

1/20/23

@

$640.00

961

52,921

(48‌)

Citibank

UnitedHealth

Group,

Call,

1/20/23

@

$540.00

1,794

95,114

(1,467‌)

Citibank

UnitedHealth

Group,

Call,

1/20/23

@

$560.00

1,014

53,760

(259‌)

Citibank

UnitedHealth

Group,

Call,

1/20/23

@

$580.00

1,014

53,760

(70‌)

Citibank

UnitedHealth

Group,

Call,

1/19/24

@

$580.00

2,096

111,126

(8,698‌)

JPMorgan

Chase

UnitedHealth

Group,

Call,

1/19/24

@

$600.00

2,209

117,117

(8,019‌)

Citibank

Yum!

Brands,

Call,

1/19/24

@

$145.00

2,241

28,703

(1,748‌)

Citibank

Yum!

Brands,

Call,

1/19/24

@

$150.00

2,241

28,703

(1,378‌)

Wells

Fargo

Bank

Yum!

Brands,

Call,

1/20/23

@

$145.00

2,042

26,154

(10‌)

Wells

Fargo

Bank

Yum!

Brands,

Call,

1/20/23

@

$150.00

2,042

26,154

(5‌)

Wells

Fargo

Bank

Yum!

Brands,

Call,

1/19/24

@

$140.00

9,000

115,272

(8,775‌)

Total

Options

Written

(Premiums

$(240,046))

$

(69,235‌)

T.

ROWE

PRICE

Capital

Appreciation

Fund

43

AFFILIATED

COMPANIES

($000s)

The

fund

may

invest

in

certain

securities

that

are

considered

affiliated

companies.

As

defined

by

the

1940

Act,

an

affiliated

company

is

one

in

which

the

fund

owns

5%

or

more

of

the

outstanding

voting

securities,

or

a

company

that

is

under

common

ownership

or

control.

The

following

securities

were

considered

affiliated

companies

for

all

or

some

portion

of

the

year

ended

December

31,

2022.

Net

realized

gain

(loss),

investment

income,

change

in

net

unrealized

gain/loss,

and

purchase

and

sales

cost

reflect

all

activity

for

the

period

then

ended.

Affiliate

Net

Realized

Gain

(Loss)

Change

in

Net

Unrealized

Gain/Loss

Investment

Income

CMS

Energy,

5.875%,

10/15/78��

$

(396‌)

$

(11,661‌)

$

3,890‌

CMS

Energy,

5.875%,

3/1/79 

(660‌)

(15,008‌)

5,079‌

Fortive 

(29,843‌)

54,583‌

4,153‌

NiSource,

VR,

5.65% 

(1,957‌)

(2,894‌)

2,266‌

NiSource,

Series

B,

VR,

6.50% 

777‌

(3,482‌)

1,465‌

PerkinElmer 

(118,838‌)

(235,483‌)

2,083‌

SCE

Trust

IV,

Series

J,

VR,

5.375% 

(1,551‌)

(11,417‌)

2,430‌

T.

Rowe

Price

Institutional

Floating

Rate

Fund

–

Institutional

Class,

7.57% 

—‌

(42,559‌)

39,056‌

TransUnion 

(1,665‌)

(279,725‌)

2,682‌

T.

Rowe

Price

Government

Reserve

Fund,

4.30%

—‌

—‌

47,520‌

Affiliates

not

held

at

period

end

61,468‌

(45,767‌)

6,195‌

Totals

$

(92,665‌)#

$

(593,413‌)

$

116,819‌+

T.

ROWE

PRICE

Capital

Appreciation

Fund

44

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

AFFILIATED

COMPANIES

(CONTINUED)

($000s)

Supplementary

Investment

Schedule

Affiliate

Value

12/31/21

Purchase

Cost

Sales

Cost

Value

12/31/22

CMS

Energy 

$

562,429‌

$

—‌

$

524,477‌

$

—‌

CMS

Energy,

5.875%,

10/15/78 

81,578‌

—‌

20,186‌

49,731‌

CMS

Energy,

5.875%,

3/1/79 

111,396‌

—‌

34,878‌

61,510‌

Fortive 

—‌

1,200,171‌

366,851‌

*

NiSource,

7.75%,

3/1/24 

73,729‌

—‌

65,914‌

—‌

NiSource,

VR,

5.65% 

45,986‌

—‌

24,456‌

*

NiSource,

Series

B,

VR,

6.50% 

38,220‌

—‌

22,233‌

*

PerkinElmer 

*

715,441‌

568,038‌

*

SCE

Trust

IV,

Series

J,

VR,

5.375% 

49,999‌

—‌

8,946‌

29,636‌

T.

Rowe

Price

Institutional

Floating

Rate

Fund

–

Institutional

Class,

7.57% 

617,662‌

174,200‌

—‌

749,303‌

TransUnion 

*

847,955‌

4,208‌

576,044‌

T.

Rowe

Price

Government

Reserve

Fund,

4.30%

5,817,258‌

  ¤

  ¤

2,714,515‌

Total

$

4,180,739‌^

#

Capital

gain

distributions

from

underlying

Price

funds

represented

$0

of

the

net

realized

gain

(loss).

+

Investment

income

comprised

$114,553

of

dividend

income

and

$2,266

of

interest

income.

*

On

the

date

indicated,

issuer

was

held

but

not

considered

an

affiliated

company.

¤

Purchase

and

sale

information

not

shown

for

cash

management

funds.

^

The

cost

basis

of

investments

in

affiliated

companies

was

$4,526,982.

T.

ROWE

PRICE

Capital

Appreciation

Fund

December

31,

2022

Statement

of

Assets

and

Liabilities

45

($000s,

except

shares

and

per

share

amounts)

Assets

Investments

in

securities,

at

value

(cost

$41,041,506)

$

45,648,915‌

Receivable

for

investment

securities

sold

201,133‌

Interest

and

dividends

receivable

147,360‌

Receivable

for

shares

sold

55,406‌

Foreign

currency

(cost

$2,617)

2,637‌

Cash

728‌

Other

assets

442‌

Total

assets

46,056,621‌

Liabilities

Payable

for

investment

securities

purchased

384,427‌

Payable

for

shares

redeemed

94,878‌

Options

written

(premiums

$240,046)

69,235‌

Investment

management

fees

payable

22,378‌

Due

to

affiliates

914‌

Payable

to

directors

29‌

Other

liabilities

28,739‌

Total

liabilities

600,600‌

NET

ASSETS

$

45,456,021‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

December

31,

2022

Statement

of

Assets

and

Liabilities

46

($000s,

except

shares

and

per

share

amounts)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Net

Assets

Consist

of:

Total

distributable

earnings

(loss)

$

4,567,433‌

Paid-in

capital

applicable

to

1,529,417,374

shares

of

$0.0001

par

value

capital

stock

outstanding;

4,000,000,000

shares

authorized

40,888,588‌

NET

ASSETS

$

45,456,021‌

NET

ASSET

VALUE

PER

SHARE

Investor

Class

($26,104,068,719

/

877,966,400

shares

outstanding)

$

29.73‌

Advisor

Class

($654,436,752

/

22,333,527

shares

outstanding)

$

29.30‌

I

Class

($18,697,515,555

/

629,117,447

shares

outstanding)

$

29.72‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Statement

of

Operations

47

($000s)

Year

Ended

12/31/22

Investment

Income

(Loss)

Income

    Interest

$

637,725‌

Dividend

(net

of

foreign

taxes

of

$2,735)

426,154‌

Other

26‌

Total

income

1,063,905‌

Expenses

Investment

management

284,018‌

Shareholder

servicing

Investor

Class

$

40,887‌

Advisor

Class

1,078‌

I

Class

1,797‌

43,762‌

Rule

12b-1

fees

Advisor

Class

1,710‌

Prospectus

and

shareholder

reports

Investor

Class

848‌

Advisor

Class

6‌

I

Class

260‌

1,114‌

Custody

and

accounting

998‌

Registration

792‌

Directors

125‌

Legal

and

audit

47‌

Miscellaneous

187‌

Waived

/

paid

by

Price

Associates

(

10,255‌

)

Total

expenses

322,498‌

Net

investment

income

741,407‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Statement

of

Operations

48

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Year

Ended

12/31/22

Realized

and

Unrealized

Gain

/

Loss

–

Net

realized

gain

(loss)

Securities

3,150,369‌

Options

written

130,060‌

Foreign

currency

transactions

(

709‌

)

Net

realized

gain

3,279,720‌

Change

in

net

unrealized

gain

/

loss

Securities

(

11,110,566‌

)

Options

written

652,129‌

Other

assets

and

liabilities

denominated

in

foreign

currencies

33‌

Change

in

net

unrealized

gain

/

loss

(

10,458,404‌

)

Net

realized

and

unrealized

gain

/

loss

(

7,178,684‌

)

DECREASE

IN

NET

ASSETS

FROM

OPERATIONS

$

(

6,437,277‌

)

T.

ROWE

PRICE

Capital

Appreciation

Fund

Statement

of

Changes

in

Net

Assets

49

($000s)

Year

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

Ended

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

12/31/22

12/31/21

Increase

(Decrease)

in

Net

Assets

Operations

Net

investment

income

$

741,407‌

$

483,934‌

Net

realized

gain

3,279,720‌

3,835,909‌

Change

in

net

unrealized

gain

/

loss

(

10,458,404‌

)

4,098,382‌

Increase

(decrease)

in

net

assets

from

operations

(

6,437,277‌

)

8,418,225‌

Distributions

to

shareholders

Net

earnings

Investor

Class

(

2,278,489‌

)

(

3,438,345‌

)

Advisor

Class

(

55,813‌

)

(

66,905‌

)

I

Class

(

1,680,332‌

)

(

1,086,206‌

)

Decrease

in

net

assets

from

distributions

(

4,014,634‌

)

(

4,591,456‌

)

Capital

share

transactions

*

Shares

sold

Investor

Class

3,945,710‌

4,539,790‌

Advisor

Class

84,849‌

81,381‌

I

Class

10,858,872‌

3,387,930‌

Distributions

reinvested

Investor

Class

2,218,918‌

3,323,178‌

Advisor

Class

54,969‌

66,028‌

I

Class

1,617,001‌

1,055,820‌

Shares

redeemed

Investor

Class

(

13,844,290‌

)

(

5,665,745‌

)

Advisor

Class

(

129,121‌

)

(

187,752‌

)

I

Class

(

2,807,670‌

)

(

1,442,667‌

)

Increase

in

net

assets

from

capital

share

transactions

1,999,238‌

5,157,963‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

Statement

of

Changes

in

Net

Assets

50

($000s)

The

accompanying

notes

are

an

integral

part

of

these

financial

statements.

Year

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

Ended

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

.

12/31/22

12/31/21

Net

Assets

Increase

(decrease)

during

period

(

8,452,673‌

)

8,984,732‌

Beginning

of

period

53,908,694‌

44,923,962‌

End

of

period

$

45,456,021‌

$

53,908,694‌

*Share

information

(000s)

Shares

sold

Investor

Class

117,469‌

122,654‌

Advisor

Class

2,604‌

2,241‌

I

Class

318,283‌

91,171‌

Distributions

reinvested

Investor

Class

74,862‌

91,522‌

Advisor

Class

1,882‌

1,842‌

I

Class

54,573‌

29,062‌

Shares

redeemed

Investor

Class

(

408,978‌

)

(

153,176‌

)

Advisor

Class

(

3,921‌

)

(

5,155‌

)

I

Class

(

85,819‌

)

(

38,913‌

)

Increase

in

shares

outstanding

70,955‌

141,248‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

NOTES

TO

FINANCIAL

STATEMENTS

51

T.

Rowe

Price

Capital

Appreciation

Fund,

Inc.

(the

fund) is

registered

under

the

Investment

Company

Act

of

1940

(the

1940

Act)

as a

diversified,

open-end

management

investment

company. The

fund

seeks

long-term

capital

appreciation

by

investing

primarily

in

common

stocks.

It

may

also

hold

fixed-income

and

other

securities

to

help

preserve

principal

value.

The

fund

has

three classes

of

shares:

the

Capital

Appreciation

Fund

(Investor

Class),

the

Capital

Appreciation

Fund–Advisor

Class

(Advisor

Class),

and

the

Capital

Appreciation

Fund–I

Class

(I

Class).

Advisor

Class

shares

are

sold

only

through

various

brokers

and

other

financial

intermediaries.

I

Class

shares

require

a

$500,000

initial

investment

minimum,

although

the

minimum

generally

is

waived

or

reduced

for

financial

intermediaries,

eligible

retirement

plans,

and

certain

other

accounts.

Prior

to

November

15,

2021,

the

initial

investment

minimum

was

$1

million

and

was

generally

waived

for

financial

intermediaries,

eligible

retirement

plans,

and

other

certain

accounts.

As

a

result

of

the

reduction

in

the

I

Class

minimum,

certain

assets

transferred

from

the

Investor

Class

to

the

I

Class.

This

transfer

of

shares

from

Investor

Class

to

I

Class

is

reflected

in

the

Statement

of

Changes

in

Net

Assets

within

the

Capital

shares

transactions

as

Shares

redeemed

and

Shares

sold,

respectively.

The

Advisor

Class

operates

under

a

Board-approved

Rule

12b-1

plan

pursuant

to

which

the

class

compensates

financial

intermediaries

for

distribution,

shareholder

servicing,

and/

or

certain

administrative

services;

the

Investor

and

I

Classes

do

not

pay

Rule

12b-1

fees. Each

class

has

exclusive

voting

rights

on

matters

related

solely

to

that

class;

separate

voting

rights

on

matters

that

relate

to

all

classes;

and,

in

all

other

respects,

the

same

rights

and

obligations

as

the

other

classes.

NOTE

1

-

SIGNIFICANT

ACCOUNTING

POLICIES 

Basis

of

Preparation

 The fund

is

an

investment

company

and

follows

accounting

and

reporting

guidance

in

the

Financial

Accounting

Standards

Board

(FASB)

Accounting

Standards

Codification

Topic

946

(ASC

946).

The

accompanying

financial

statements

were

prepared

in

accordance

with

accounting

principles

generally

accepted

in

the

United

States

of

America

(GAAP),

including,

but

not

limited

to,

ASC

946.

GAAP

requires

the

use

of

estimates

made

by

management.

Management

believes

that

estimates

and

valuations

are

appropriate;

however,

actual

results

may

differ

from

those

estimates,

and

the

valuations

reflected

in

the

accompanying

financial

statements

may

differ

from

the

value

ultimately

realized

upon

sale

or

maturity.

T.

ROWE

PRICE

Capital

Appreciation

Fund

52

Investment

Transactions,

Investment

Income,

and

Distributions

Investment

transactions

are

accounted

for

on

the

trade

date

basis.

Income

and

expenses

are

recorded

on

the

accrual

basis.

Realized

gains

and

losses

are

reported

on

the

identified

cost

basis.

Premiums

and

discounts

on

debt

securities

are

amortized

for

financial

reporting

purposes.

Paydown

gains

and

losses

are

recorded

as

an

adjustment

to

interest

income.

Income

tax-related

interest

and

penalties,

if

incurred,

are

recorded

as

income

tax

expense.

Dividends

received

from

mutual

fund

investments

are

reflected

as

dividend

income;

capital

gain

distributions

are

reflected

as

realized

gain/loss.

Dividend

income

and

capital

gain

distributions

are

recorded

on

the

ex-dividend

date.

Non-cash

dividends,

if

any,

are

recorded

at

the

fair

market

value

of

the

asset

received.

Proceeds

from

litigation

payments,

if

any,

are

included

in

either

net

realized

gain

(loss)

or

change

in

net

unrealized

gain/loss

from

securities.

Distributions

to

shareholders

are

recorded

on

the

ex-dividend

date.

Income

distributions,

if

any,

are

declared

and

paid

by

each

class annually.

A

capital

gain

distribution,

if

any, may

also

be

declared

and

paid

by

the

fund

annually.

Currency

Translation

 Assets,

including

investments,

and

liabilities

denominated

in

foreign

currencies

are

translated

into

U.S.

dollar

values

each

day

at

the

prevailing

exchange

rate,

using

the

mean

of

the

bid

and

asked

prices

of

such

currencies

against

U.S.

dollars

as

provided

by

an

outside

pricing

service.

Purchases

and

sales

of

securities,

income,

and

expenses

are

translated

into

U.S.

dollars

at

the

prevailing

exchange

rate

on

the

respective

date

of

such

transaction.

The

effect

of

changes

in

foreign

currency

exchange

rates

on

realized

and

unrealized

security

gains

and

losses

is

not

bifurcated

from

the

portion

attributable

to

changes

in

market

prices.

Class

Accounting

 Shareholder

servicing,

prospectus,

and

shareholder

report

expenses

incurred

by

each

class

are

charged

directly

to

the

class

to

which

they

relate.

Expenses

common

to all classes,

investment

income,

and

realized

and

unrealized

gains

and

losses

are

allocated

to

the

classes

based

upon

the

relative

daily

net

assets

of

each

class.

The

Advisor

Class

pays

Rule

12b-1

fees,

in

an

amount

not

exceeding

0.25%

of

the

class’s

average

daily

net

assets.

Capital

Transactions

 Each

investor’s

interest

in

the

net

assets

of the

fund

is

represented

by

fund

shares. The

fund’s

net

asset

value

(NAV)

per

share

is

computed

at

the

close

of

the

New

York

Stock

Exchange

(NYSE),

normally

4

p.m.

ET,

each

day

the

NYSE

is

open

for

business.

However,

the

NAV

per

share

may

be

calculated

at

a

time

other

than

the

normal

close

of

the

NYSE

if

trading

on

the

NYSE

is

restricted,

if

the

NYSE

closes

earlier,

or

as

may

be

permitted

by

the

SEC.

Purchases

and

redemptions

of

fund

shares

are

transacted

at

the

next-computed

NAV

per

share,

after

receipt

of

the

transaction

order

by

T.

Rowe

Price

Associates,

Inc.,

or

its

agents.

T.

ROWE

PRICE

Capital

Appreciation

Fund

53

New

Accounting

Guidance

 In

June

2022,

the

FASB

issued

Accounting

Standards

Update

(ASU),

ASU

2022-03,

Fair

Value

Measurement

(Topic

820)

–

Fair

Value

Measurement

of

Equity

Securities

Subject

to

Contractual

Sale

Restrictions,

which

clarifies

that

a

contractual

restriction

on

the

sale

of

an

equity

security

is

not

considered

part

of

the

unit

of

account

of

the

equity

security

and,

therefore,

is

not

considered

in

measuring

fair

value.

The

amendments

under

this

ASU

are

effective

for

fiscal

years

beginning

after

December

15,

2023;

however,

the

fund

opted

to

early

adopt,

as

permitted,

effective

December

1,

2022. Adoption

of

the

guidance

did not

have

a

material

impact

on

the fund's

financial  statements.

The

FASB

issued

Accounting

Standards

Update

(ASU),

ASU

2020–04,

Reference

Rate

Reform

(Topic

848) –

Facilitation

of

the

Effects

of

Reference

Rate

Reform

on

Financial

Reporting

in

March

2020

and

ASU

2021-01

in

January

2021

which

provided

further

amendments

and

clarifications

to

Topic

848.

These

ASUs provide

optional,

temporary

relief

with

respect

to

the

financial

reporting

of

contracts

subject

to

certain

types

of

modifications

due

to

the

planned

discontinuation

of

the

London

Interbank

Offered

Rate

(LIBOR),

and

other

interbank-offered

based

reference

rates,

through December

31,

2022.

In

December,

2022,

FASB

issued

ASU

2022-06

which

defers

the

sunset

date

of

Topic

848

from

December

31,

2022,

to

December

31,

2024,

after

which

entities

will

no

longer

be

permitted

to

apply

the

relief

in

Topic

848.

Management

intends

to

rely

upon

the

relief

provided

under

Topic

848,

which

is

not

expected to

have

a

material

impact

on

the fund's

financial  statements.

Indemnification

 In

the

normal

course

of

business, the

fund

may

provide

indemnification

in

connection

with

its

officers

and

directors,

service

providers,

and/or

private

company

investments. The

fund’s

maximum

exposure

under

these

arrangements

is

unknown;

however,

the

risk

of

material

loss

is

currently

considered

to

be

remote.

NOTE

2

-

VALUATION 

Fair

Value

  The

fund’s

financial

instruments

are

valued

at

the

close

of

the

NYSE

and

are

reported

at

fair

value,

which

GAAP

defines

as

the

price

that

would

be

received

to

sell

an

asset

or

paid

to

transfer

a

liability

in

an

orderly

transaction

between

market

participants

at

the

measurement

date. The fund’s

Board

of

Directors

(the

Board)

has

designated

T.

Rowe

Price

Associates,

Inc.

as

the

fund’s

valuation

designee

(Valuation

Designee).

Subject

to

oversight

by

the

Board,

the

Valuation

Designee

performs

the

following

functions

in

performing

fair

value

determinations:

assesses

and

manages

valuation

risks;

establishes

and

applies

fair

value

methodologies;

tests

fair

value

methodologies;

T.

ROWE

PRICE

Capital

Appreciation

Fund

54

and

evaluates

pricing

vendors

and

pricing

agents.

The

duties

and

responsibilities

of

the

Valuation

Designee

are

performed

by

its

Valuation

Committee. The

Valuation

Designee provides

periodic

reporting

to

the

Board

on

valuation

matters.

Various

valuation

techniques

and

inputs

are

used

to

determine

the

fair

value

of

financial

instruments.

GAAP

establishes

the

following

fair

value

hierarchy

that

categorizes

the

inputs

used

to

measure

fair

value:

Level

1

–

quoted

prices

(unadjusted)

in

active

markets

for

identical

financial

instruments

that

the

fund

can

access

at

the

reporting

date

Level

2

–

inputs

other

than

Level

1

quoted

prices

that

are

observable,

either

directly

or

indirectly

(including,

but

not

limited

to,

quoted

prices

for

similar

financial

instruments

in

active

markets,

quoted

prices

for

identical

or

similar

financial

instruments

in

inactive

markets,

interest

rates

and

yield

curves,

implied

volatilities,

and

credit

spreads)

Level

3

–

unobservable

inputs

(including

the Valuation

Designee’s assumptions

in

determining

fair

value)

Observable

inputs

are

developed

using

market

data,

such

as

publicly

available

information

about

actual

events

or

transactions,

and

reflect

the

assumptions

that

market

participants

would

use

to

price

the

financial

instrument.

Unobservable

inputs

are

those

for

which

market

data

are

not

available

and

are

developed

using

the

best

information

available

about

the

assumptions

that

market

participants

would

use

to

price

the

financial

instrument.

GAAP

requires

valuation

techniques

to

maximize

the

use

of

relevant

observable

inputs

and

minimize

the

use

of

unobservable

inputs.

When

multiple

inputs

are

used

to

derive

fair

value,

the

financial

instrument

is

assigned

to

the

level

within

the

fair

value

hierarchy

based

on

the

lowest-level

input

that

is

significant

to

the

fair

value

of

the

financial

instrument.

Input

levels

are

not

necessarily

an

indication

of

the

risk

or

liquidity

associated

with

financial

instruments

at

that

level

but

rather

the

degree

of

judgment

used

in

determining

those

values.

Valuation

Techniques 

Equity

securities,

including

exchange-traded

funds, listed

or

regularly

traded

on

a

securities

exchange

or

in

the

over-the-counter

(OTC)

market

are

valued

at

the

last

quoted

sale

price

or,

for

certain

markets,

the

official

closing

price

at

the

time

the

valuations

are

made.

OTC

Bulletin

Board

securities

are

valued

at

the

mean

of

the

closing

bid

and

asked

prices.

A

security

that

is

listed

or

traded

on

more

than

one

exchange

is

valued

at

the

quotation

on

the

exchange

determined

to

be

the

primary

market

for

such

security.

Listed

securities

not

traded

on

a

particular

day

are

valued

at

the

mean

of

the

closing

bid

and

asked

prices

for

domestic

securities

and

the

last

quoted

sale

or

closing

price

for

international

securities.

T.

ROWE

PRICE

Capital

Appreciation

Fund

55

The

last

quoted

prices

of

non-U.S.

equity

securities

may

be

adjusted

to

reflect

the

fair

value

of

such

securities

at

the

close

of

the

NYSE,

if

the Valuation

Designee

determines

that

developments

between

the

close

of

a

foreign

market

and

the

close

of

the

NYSE

will

affect

the

value

of

some

or

all

of the

fund’s

portfolio

securities.

Each

business

day,

the

Valuation

Designee uses

information

from

outside

pricing

services

to

evaluate

the

quoted

prices

of

portfolio

securities

and,

if

appropriate,

decide whether

it

is

necessary

to

adjust

quoted

prices

to

reflect

fair

value

by

reviewing

a

variety

of

factors,

including

developments

in

foreign

markets,

the

performance

of

U.S.

securities

markets,

and

the

performance

of

instruments

trading

in

U.S.

markets

that

represent

foreign

securities

and

baskets

of

foreign

securities. The Valuation

Designee

uses

outside

pricing

services

to

provide

it

with

quoted

prices

and

information

to

evaluate

or

adjust

those

prices.

The Valuation

Designee

cannot

predict

how

often

it

will

use

quoted

prices

and

how

often

it

will

determine

it

necessary

to

adjust

those

prices

to

reflect

fair

value.

Debt

securities

generally

are

traded

in

the over-the-counter

(OTC)

market

and

are

valued

at

prices

furnished

by

independent

pricing

services

or

by

broker

dealers

who

make

markets

in

such

securities.

When

valuing

securities,

the

independent

pricing

services

consider

factors

such

as,

but

not

limited

to,

the

yield

or

price

of

bonds

of

comparable

quality,

coupon,

maturity,

and

type,

as

well

as

prices

quoted

by

dealers

who

make

markets

in

such

securities.

Investments

in

mutual

funds

are

valued

at

the

mutual

fund’s

closing

NAV

per

share

on

the

day

of

valuation.

Listed

options,

and

OTC

options

with

a

listed

equivalent,

are

valued

at

the

mean

of

the

closing

bid

and

asked

prices

and

exchange-traded

options

on

futures

contracts

are

valued

at

closing

settlement

prices.

Assets

and

liabilities

other

than

financial

instruments,

including

short-term

receivables

and

payables,

are

carried

at

cost,

or

estimated

realizable

value,

if

less,

which

approximates

fair

value. 

Investments

for

which

market

quotations are

not

readily

available

or

deemed

unreliable

are

valued

at

fair

value

as

determined

in

good

faith

by

the

Valuation

Designee.

The

Valuation

Designee

has

adopted

methodologies

for

determining

the

fair

value

of

investments

for

which

market

quotations

are

not

readily

available

or

deemed

unreliable,

including

the

use

of

other

pricing

sources.

Factors

used

in

determining

fair

value

vary

by

type

of

investment

and

may

include

market

or

investment

specific

considerations.

The

Valuation

Designee typically

will

afford

greatest

weight

to

actual

prices

in

arm’s

length

transactions,

to

the

extent

they

represent

orderly

transactions

between

market

participants,

transaction

information

can

be

reliably

obtained,

and

prices

are

deemed

representative

of

fair

value.

However,

the

Valuation

Designee may

also

consider

other

valuation

methods

such

as

market-based

valuation

multiples;

a

discount

or

premium

from

market

value

of

a

similar,

freely

traded

security

of

the

same

issuer;

discounted

cash

flows;

yield

to

maturity;

or

some

combination.

Fair

value

determinations

are

reviewed

T.

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Capital

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56

on

a

regular

basis.

Because

any

fair

value

determination

involves

a

significant

amount

of

judgment,

there

is

a

degree

of

subjectivity

inherent

in

such

pricing

decisions. Fair

value

prices

determined

by

the

Valuation

Designee could

differ

from

those

of

other

market

participants,

and

it

is

possible

that

the

fair

value

determined

for

a

security

may

be

materially

different

from

the

value

that

could

be

realized

upon

the

sale

of

that

security.

Valuation

Inputs

  The

following

table

summarizes

the

fund’s

financial

instruments,

based

on

the

inputs

used

to

determine

their

fair

values

on

December

31,

2022

(for

further

detail

by

category,

please

refer

to

the

accompanying

Portfolio

of

Investments):

NOTE

3

-

DERIVATIVE

INSTRUMENTS 

During

the

year ended

December

31,

2022,

the

fund

invested

in

derivative

instruments.

As

defined

by

GAAP,

a

derivative

is

a

financial

instrument

whose

value

is

derived

from

an

underlying

security

price,

foreign

exchange

rate,

interest

rate,

index

of

prices

or

rates,

or

other

variable;

it

requires

little

or

no

initial

investment

and

permits

or

requires

net

settlement.

The

fund

invests

in

derivatives

only

if

the

expected

risks

and

rewards

are

consistent

with

its

investment

objectives,

policies,

and

overall

risk

profile,

as

described

in

($000s)

Level

1

Level

2

Level

3

Total

Value

Assets

Fixed

Income

Securities

1

$

—

$

10,057,442

$

—

$

10,057,442

Bond

Mutual

Funds

749,303

—

—

749,303

Common

Stocks

27,658,896

477,937

—

28,136,833

Convertible

Preferred

Stocks

—

—

109,432

109,432

Corporate

Bonds

—

3,725,748

—

3,725,748

Preferred

Stocks

155,642

—

—

155,642

Short-Term

Investments

2,714,515

—

—

2,714,515

Total

$

31,278,356

$

14,261,127

$

109,432

$

45,648,915

Liabilities

Options

Written

$

—

$

69,235

$

—

$

69,235

1

Includes

Asset-Backed

Securities,

Bank

Loans,

Convertible

Bonds

and

U.S.

Government

Agency

Obligations

(Excluding

Mortgage-Backed).

T.

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57

its

prospectus

and

Statement

of

Additional

Information.

The

fund

may

use

derivatives

for

a

variety

of

purposes

and

may

use

them

to

establish

both

long

and

short

positions

within

the

fund’s

portfolio.

Potential

uses

include

to

hedge

against

declines

in

principal

value,

increase

yield,

invest

in

an

asset

with

greater

efficiency

and

at

a

lower

cost

than

is

possible

through

direct

investment,

to

enhance

return,

or

to

adjust

credit

exposure.

The

risks

associated

with

the

use

of

derivatives

are

different

from,

and

potentially

much

greater

than,

the

risks

associated

with

investing

directly

in

the

instruments

on

which

the

derivatives

are

based.

The

fund

values

its

derivatives

at

fair

value

and

recognizes

changes

in

fair

value

currently

in

its

results

of

operations.

Accordingly,

the

fund

does

not

follow

hedge

accounting,

even

for

derivatives

employed

as

economic

hedges.

Generally,

the

fund

accounts

for

its

derivatives

on

a

gross

basis.

It

does

not

offset

the

fair

value

of

derivative

liabilities

against

the

fair

value

of

derivative

assets

on

its

financial

statements,

nor

does

it

offset

the

fair

value

of

derivative

instruments

against

the

right

to

reclaim

or

obligation

to

return

collateral.

The

following

table

summarizes

the

fair

value

of

the

fund’s

derivative

instruments

held

as

of

December

31,

2022,

and

the

related

location

on

the

accompanying

Statement

of

Assets

and

Liabilities,

presented

by

primary

underlying

risk

exposure:

($000s)

Location

on

Statement

of

Assets

and

Liabilities

Fair

Value

Liabilities

Equity

derivatives

Options

Written

$

69,235‌

Total

$

69,235‌

T.

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Additionally,

the

amount

of

gains

and

losses

on

derivative

instruments

recognized

in

fund

earnings

during

the

year ended

December

31,

2022,

and

the

related

location

on

the

accompanying

Statement

of

Operations

is

summarized

in

the

following

table

by

primary

underlying

risk

exposure: 

Counterparty

Risk

and

Collateral

 The

fund

invests

in

derivatives,

such

as

non-cleared

bilateral

swaps,

forward

currency

exchange

contracts,

and/or

OTC

options,

that

are

transacted

and

settle

directly

with

a

counterparty

(bilateral

derivatives),

and

thereby

may

expose

the

fund

to

counterparty

risk.

To

mitigate

this

risk,

the

fund

has

entered

into

master

netting

arrangements

(MNAs)

with

certain

counterparties

that

permit

net

settlement

under

specified

conditions

and,

for

certain

counterparties,

also

require

the

exchange

of

collateral

to

cover

mark-to-market

exposure.

MNAs

may

be

in

the

form

of

International

Swaps

and

Derivatives

Association

master

agreements

(ISDAs)

or

foreign

exchange

letter

agreements

(FX

letters).

MNAs

govern

the

ability

to

offset

amounts

the

fund

owes

a

counterparty

against

amounts

the

counterparty

owes

the

fund

(net

settlement).

Both

ISDAs

and

FX

letters

generally

allow

termination

of

transactions

and

net

settlement

upon

the

occurrence

of

contractually

specified

events,

such

as

failure

to

pay

or

bankruptcy.

In

addition,

ISDAs

specify

other

events,

the

occurrence

of

which

would

allow

one

of

the

parties

to

terminate.

For

example,

a

downgrade

in

credit

rating

of

a

counterparty

below

a

specified

rating

would

allow

the

fund

to

terminate,

while

a

decline

in

the

fund’s

net

assets

of

more

than

a

specified

percentage

would

allow

the

counterparty

to

terminate.

Upon

termination,

all

transactions

with

that

counterparty

would

be

liquidated

and

a

net

termination

amount

determined.

ISDAs

typically

include

collateral

agreements

($000s)                                               

Location

of

Gain

(Loss)

on

Statement

of

Operations

Options

Written

Realized

Gain

(Loss)

Equity

derivatives

$

130,060‌

Total

$

130,060‌

Change

in

Unrealized

Gain

(Loss)

Equity

derivatives

$

652,129‌

Total

$

652,129‌

T.

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Capital

Appreciation

Fund

59

whereas

FX

letters

do

not.

Collateral

requirements

are

determined

daily

based

on

the

net

aggregate

unrealized

gain

or

loss

on

all

bilateral

derivatives

with

each

counterparty,

subject

to

minimum

transfer

amounts

that

typically

range

from

$100,000

to

$250,000.

Any

additional

collateral

required

due

to

changes

in

security

values

is

typically

transferred

the

next

business

day.

Collateral may

be

in

the

form

of

cash

or

debt

securities

issued

by

the

U.S.

government

or

related

agencies,

although

other

securities

may

be

used

depending

on

the

terms

outlined

in

the

applicable

MNA.

Cash

posted

by

the

fund

is

reflected

as

cash

deposits

in

the

accompanying

financial

statements

and

generally

is

restricted

from

withdrawal

by

the

fund;

securities

posted

by

the

fund

are

so

noted

in

the

accompanying

Portfolio

of

Investments;

both

remain

in

the

fund’s

assets.

Collateral

pledged

by

counterparties

is

not

included

in

the

fund’s

assets

because

the

fund

does

not

obtain

effective

control

over

those

assets.

For

bilateral

derivatives,

collateral

posted

or

received

by

the

fund

is

held

in

a

segregated

account

at

the

fund’s

custodian.

While

typically

not

sold

in

the

same

manner

as

equity

or

fixed

income

securities,

OTC

and

bilateral

derivatives

may

be

unwound

with

counterparties

or

transactions

assigned

to

other

counterparties

to

allow

the

fund

to

exit

the

transaction.

This

ability

is

subject

to

the

liquidity

of

underlying

positions. As

of

December

31,

2022,

securities

valued

at $1,411,952,000

had

been

posted

by

the

fund

to

counterparties

for

bilateral

derivatives. As

of

December

31,

2022,

no

collateral

was

pledged

by

counterparties

to

the

fund

for

bilateral

derivatives.

Options 

 The

fund

is

subject

to equity

price

risk in

the

normal

course

of

pursuing

its

investment

objectives

and

uses

options

to

help

manage

such

risk.

The

fund

may

use

options

to

manage

exposure

to

security

prices,

interest

rates,

foreign

currencies,

and

credit

quality;

as

an

efficient

means

of

adjusting

exposure

to

all

or

a

part

of

a

target

market;

to

enhance

income;

as

a

cash

management

tool;

or

to

adjust

credit

exposure.

Options

are

included

in

net

assets

at

fair

value,

options

purchased

are

included

in

Investments

in

Securities,

and

options

written

are

separately

reflected

as

a

liability

on

the

accompanying

Statement

of

Assets

and

Liabilities.

Premiums

on

unexercised,

expired

options

are

recorded

as

realized

gains

or

losses;

premiums

on

exercised

options

are

recorded

as

an

adjustment

to

the

proceeds

from

the

sale

or

cost

of

the

purchase.

The

difference

between

the

premium

and

the

amount

received

or

paid

in

a

closing

transaction

is

also

treated

as

realized

gain

or

loss.

In

return

for

a

premium

paid,

call

and

put

options

give

the

holder

the

right,

but

not

the

obligation,

to

purchase

or

sell,

respectively,

a

security

at

a

specified

exercise

price.

Risks related

to

the

use

of

options

include

possible

illiquidity

of

the

options

markets;

trading

restrictions

imposed

by

an

exchange

or

counterparty;

possible

failure

of

counterparties

to

meet

the

terms

of

the

agreements;

movements

in

the

underlying

asset

values

and,

for

options

written,

the

T.

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PRICE

Capital

Appreciation

Fund

60

potential

for

losses

to

exceed

any

premium

received

by

the

fund.

During

the

year ended

December

31,

2022,

the

volume

of

the

fund’s

activity

in

options,

based

on

underlying

notional

amounts,

was

generally

between

6%

and

13%

of

net

assets.

NOTE

4

-

OTHER

INVESTMENT

TRANSACTIONS 

Consistent

with

its

investment

objective,

the

fund

engages

in

the

following

practices

to

manage

exposure

to

certain

risks

and/or

to

enhance

performance.

The

investment

objective,

policies,

program,

and

risk

factors

of

the

fund

are

described

more

fully

in

the

fund’s

prospectus

and

Statement

of

Additional

Information.

Noninvestment-Grade

Debt

 The

fund

invests,

either

directly

or

through

its

investment

in

other

T.

Rowe

Price

funds,

in

noninvestment-grade

debt,

including

“high

yield”

or

“junk”

bonds

or

leveraged

loans.

Noninvestment-grade

debt

issuers

are

more

likely

to

suffer

an

adverse

change

in

financial

condition

that

would

result

in

the

inability

to

meet

a

financial

obligation.

The

noninvestment-grade

debt

market

may

experience

sudden

and

sharp

price

swings

due

to

a

variety

of

factors

that

may

decrease

the

ability

of

issuers

to

make

principal

and

interest

payments

and

adversely

affect

the

liquidity

or

value,

or

both,

of

such

securities.

Accordingly,

securities

issued

by

such

companies

carry

a

higher

risk

of

default

and

should

be

considered

speculative. 

Restricted

Securities

 The

fund

invests

in

securities

that

are

subject

to

legal

or

contractual

restrictions

on

resale.

Prompt

sale

of

such

securities

at

an

acceptable

price

may

be

difficult

and

may

involve

substantial

delays

and

additional

costs.

When-Issued

Securities

 The fund

enters

into

when-issued

purchase

or

sale

commitments,

pursuant

to

which

it

agrees

to

purchase

or

sell,

respectively,

an

authorized

but

not

yet

issued

security

for

a

fixed

unit

price,

with

payment

and

delivery

not

due

until

issuance

of

the

security

on

a

scheduled

future

date.

When-issued

securities

may

be

new

securities

or

securities

issued

through

a

corporate

action,

such

as

a

reorganization

or

restructuring.

Until

settlement,

the

fund

maintains

liquid

assets

sufficient

to

settle

its

commitment

to

purchase

a

when-issued

security

or,

in

the

case

of

a

sale

commitment,

the

fund

maintains

an

entitlement

to

the

security

to

be

sold.

Amounts

realized

on

when-

issued

transactions

are

included

in

realized

gain/loss

on

securities

in

the

accompanying

financial

statements. 

Bank

Loans

 The

fund

invests

in

bank

loans,

which

represent

an

interest

in

amounts

owed

by

a

borrower

to

a

syndicate

of

lenders.

Bank

loans

are

generally

noninvestment

grade

and

often

involve

borrowers

whose

financial

condition

is

highly

leveraged.

The

fund

may

invest

in

fixed

and

floating

rate

loans,

which

may

include

senior

floating

rate

loans;

secured

and

unsecured

loans,

second

lien

or

more

junior

loans;

and

bridge

loans

T.

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Capital

Appreciation

Fund

61

or

bridge

facilities.

Certain

bank

loans

may

be

revolvers

which

are

a

form

of

senior

bank

debt,

where

the

borrower

can

draw

down

the

credit

of

the

revolver

when

it

needs

cash

and

repays

the

credit

when

the

borrower

has

excess

cash.

Certain

loans

may

be

“covenant-lite”

loans,

which

means

the

loans

contain

fewer

maintenance

covenants

than

other

loans

(in

some

cases,

none)

and

do

not

include

terms

which

allow

the

lender

to

monitor

the

performance

of

the

borrower

and

declare

a

default

if

certain

criteria

are

breached.

As

a

result

of

these

risks,

the

fund’s

exposure

to

losses

may

be

increased.

Bank

loans

may

be

in

the

form

of

either

assignments

or

participations.

A

loan

assignment

transfers

all

legal,

beneficial,

and

economic

rights

to

the

buyer,

and

transfer

typically

requires

consent

of

both

the

borrower

and

agent.

In

contrast,

a

loan

participation

generally

entitles

the

buyer

to

receive

the

cash

flows

from

principal,

interest,

and

any

fee

payments

on

a

portion

of

a

loan;

however,

the

seller

continues

to

hold

legal

title

to

that

portion

of

the

loan.

As

a

result,

the

buyer

of

a

loan

participation

generally

has

no

direct

recourse

against

the

borrower

and

is

exposed

to

credit

risk

of

both

the

borrower

and

seller

of

the

participation.

Bank

loans

often

have

extended

settlement

periods,

generally

may

be

repaid

at

any

time

at

the

option

of

the

borrower,

and

may

require

additional

principal

to

be

funded

at

the

borrowers’

discretion

at

a

later

date

(e.g.

unfunded

commitments

and

revolving

debt

instruments).

Until

settlement,

the

fund

maintains

liquid

assets

sufficient

to

settle

its

unfunded

loan

commitments.

The

fund

reflects

both

the

funded

portion

of

a

bank

loan

as

well

as

its

unfunded

commitment

in

the

Portfolio

of

Investments.

However,

if

a

credit

agreement

provides

no

initial

funding

of

a

tranche,

and

funding

of

the

full

commitment

at

a

future

date(s)

is

at

the

borrower’s

discretion

and

considered

uncertain,

a

loan

is

reflected

in

the

Portfolio

of

Investments

only

if,

and

only

to

the

extent

that,

the

fund

has

actually

settled

a

funding

commitment.

LIBOR

Transition

 The fund

may

invest

in

instruments

that

are

tied

to

reference

rates,

including

LIBOR.

Over

the

course

of

the

last

several

years,

global

regulators

have

indicated

an

intent

to

phase

out

the

use

of

LIBOR

and

similar

interbank

offered

rates

(IBOR).

While

publication

for

most

LIBOR

currencies

and

lesser-used

USD

LIBOR

settings

ceased

immediately

after

December

31,

2021,

remaining

USD

LIBOR

settings

will

continue

to

be

published

until

June

30,

2023.

There

remains

uncertainty

regarding

the

future

utilization

of

LIBOR

and

the

nature

of

any

replacement

rate.

Any

potential

effects

of

the

transition

away

from

LIBOR

on

the fund,

or

on

certain

instruments

in

which

the fund

invests,

cannot

yet

be

determined.

The

transition

process

may

result

in,

among

other

things,

an

increase

in

volatility

or

illiquidity

of

markets

for

instruments

that

currently

rely

on

LIBOR,

a

reduction

in

the

value

of

certain

instruments

held

by

the fund,

or

a

reduction

in

the

effectiveness

of

related

fund

transactions

such

as

hedges.

Any

such

effects

could

have

an

adverse

impact

on

the fund's

performance.

T.

ROWE

PRICE

Capital

Appreciation

Fund

62

Other 

Purchases

and

sales

of

portfolio

securities

other

than

short-term and

U.S.

government

securities

aggregated $30,506,654,000 and

$33,410,639,000,

respectively,

for

the

year ended

December

31,

2022.

Purchases

and

sales

of

U.S.

government

securities

aggregated

$9,314,967,000 and

$4,921,958,000,

respectively,

for

the

year ended

December

31,

2022.

NOTE

5

-

FEDERAL

INCOME

TAXES

Generally,

no

provision

for

federal

income

taxes

is

required

since

the

fund

intends

to

continue

to

qualify

as

a

regulated

investment

company

under

Subchapter

M

of

the

Internal

Revenue

Code

and

distribute

to

shareholders

all

of

its

taxable

income

and

gains.

Distributions

determined

in

accordance

with

federal

income

tax

regulations

may

differ

in

amount

or

character

from

net

investment

income

and

realized

gains

for

financial

reporting

purposes.

The fund

files

U.S.

federal,

state,

and

local

tax

returns

as

required. The

fund’s

tax

returns

are

subject

to

examination

by

the

relevant

tax

authorities

until

expiration

of

the

applicable

statute

of

limitations,

which

is

generally

three

years

after

the

filing

of

the

tax

return

but

which

can

be

extended

to

six

years

in

certain

circumstances.

Tax

returns

for

open

years

have

incorporated

no

uncertain

tax

positions

that

require

a

provision

for

income

taxes.

Capital

accounts

within

the

financial

reporting

records

are

adjusted

for

permanent

book/

tax

differences

to

reflect

tax

character

but

are

not

adjusted

for

temporary

differences.

The

permanent

book/tax

adjustments,

if

any,

have

no

impact

on

results

of

operations

or

net

assets.

The

permanent

book/tax

adjustments

relate

primarily

to

deemed

distributions

on

shareholder

redemptions.

The

tax

character

of

distributions

paid

for

the

periods

presented

was

as

follows:

($000s)

December

31,

2022

December

31,

2021

Ordinary

income

(including

short-term

capital

gains,

if

any)

$

727,424‌

$

2,335,918‌

Long-term

capital

gain

3,287,210‌

2,255,538‌

Total

distributions

$

4,014,634‌

$

4,591,456‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

63

At

December

31,

2022,

the

tax-basis

cost

of

investments

(including

derivatives,

if

any)

and

gross

unrealized

appreciation

and

depreciation

were

as

follows:

At

December

31,

2022,

the

tax-basis

components

of

accumulated

net

earnings

(loss)

were

as

follows:

Temporary

differences

between

book-basis

and

tax-basis

components

of

total

distributable

earnings

(loss)

arise

when

certain

items

of

income,

gain,

or

loss

are

recognized

in

different

periods

for

financial

statement

purposes

versus

for

tax

purposes;

these

differences

will

reverse

in

a

subsequent

reporting

period.

The

temporary

differences

relate

primarily

to

the

deferral

of

losses

from

wash

sales.

NOTE

6

-

FOREIGN  TAXES

The

fund

is

subject

to

foreign

income

taxes

imposed

by

certain

countries

in

which

it

invests.

Additionally,

capital

gains

realized

upon

disposition

of

securities

issued

in

or

by

certain

foreign

countries

are

subject

to

capital

gains

tax

imposed

by

those

countries.

All

taxes

are

computed

in

accordance

with

the

applicable

foreign

tax

law,

and,

to

the

extent

permitted,

capital

losses

are

used

to

offset

capital

gains.

Taxes

attributable

to

income

are

accrued

by

the

fund

as

a

reduction

of

income.

Current

and

deferred

tax

expense

attributable

to

capital

gains

is

reflected

as

a

component

of

realized

or

change

in

unrealized

gain/loss

on

securities

in

the

accompanying

financial

statements.

To

the

extent

that

the

fund

has

country

specific

capital

loss

carryforwards,

such

carryforwards

are

applied

against

net

unrealized

gains

when

determining

the

deferred

tax

liability.

Any

deferred

tax

liability

incurred

by

the

fund

is

included

in

either

Other

liabilities

or

Deferred

tax

liability

on

the

accompanying

Statement

of

Assets

and

Liabilities.

($000s)

Cost

of

investments

$

41,189,632‌

Unrealized

appreciation

$

6,568,074‌

Unrealized

depreciation

(2,177,994‌)

Net

unrealized

appreciation

(depreciation)

$

4,390,080‌

($000s)

Undistributed

long-term

capital

gain

$

177,353‌

Net

unrealized

appreciation

(depreciation)

4,390,080‌

Total

distributable

earnings

(loss)

$

4,567,433‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

64

NOTE

7

-

RELATED

PARTY

TRANSACTIONS

The

fund

is

managed

by

T.

Rowe

Price

Associates,

Inc.

(Price

Associates),

a

wholly

owned

subsidiary

of

T.

Rowe

Price

Group,

Inc.

(Price

Group). Price

Associates

has

entered

into

a

sub-advisory

agreement(s)

with

one

or

more

of

its

wholly

owned

subsidiaries,

to

provide

investment

advisory

services

to

the

fund. The

investment

management

agreement

between

the

fund

and

Price

Associates

provides

for

an

annual

investment

management

fee

that

consists

of

an

individual

fund

fee

and

a

group

fee;

management

fees

are

computed

daily

and

paid

monthly.

The

investment

management

agreement

provides

for

an

individual

fund

fee

equal

to

0.30%

of

the fund’s

average

daily

net

assets.

The

group

fee

rate

is

calculated

based

on

the

combined

net

assets

of

certain

mutual

funds

sponsored

by

Price

Associates

(the

group)

applied

to

a

graduated

fee

schedule,

with

rates

ranging

from

0.48%

for

the

first

$1

billion

of

assets

to

0.260%

for

assets

in

excess

of

$845

billion.

The

fund’s

group

fee

is

determined

by

applying

the

group

fee

rate

to

the

fund’s

average

daily

net

assets.

At December

31,

2022,

the

effective

annual

group

fee

rate

was

0.29%. Effective

April

30,

2019,

Price

Associates

has

contractually

agreed,

at

least

through

April

30,

2023,

to

waive

a

portion

of

its

management

fee

so

that

an

individual

fund

fee

of 0.27%

is

applied

to

the

fund’s

average

daily

net

assets

that

are

equal

to

or

greater

than $27.5

billion.

Thereafter,

this

agreement

will

automatically

renew

for

one-year

terms

unless

terminated

by

the

fund’s

Board.

Any

fees

waived

under

this

agreement

are

not

subject

to

reimbursement

to

Price

Associates

by

the

fund. The

total

management

fees

waived

were $6,311,000

and

allocated

ratably

in

the

amounts

of

$3,867,000

for

the

Investor

Class,

$90,000

for

the

Advisor

Class,

and

$2,354,000

for

the

I

Class,

for

the

year

ended

December

31,

2022.

The

I

Class

is

subject

to

an

operating

expense

limitation

(I

Class

Limit)

pursuant

to

which

Price

Associates

is

contractually

required

to

pay

all

operating

expenses

of

the

I

Class,

excluding

management

fees;

interest;

expenses

related

to

borrowings,

taxes,

and

brokerage; non-recurring,

extraordinary expenses; and

acquired

fund

fees

and

expenses, to

the

extent

such

operating

expenses,

on

an

annualized

basis,

exceed

the

I

Class

Limit. This

agreement

will

continue

through

the

expense

limitation

date

indicated

in

the

table

below,

and

may

be

renewed,

revised,

or

revoked

only

with

approval

of

the

fund’s

Board.

The

I

Class

is

required

to

repay

Price

Associates

for

expenses

previously

paid

to

the

extent

the

class’s

net

assets

grow

or

expenses

decline

sufficiently

to

allow

repayment

without

causing

the

class’s

operating

expenses

(after

the

repayment

is

taken

into

account)

to

exceed

the

lesser

of:

(1)

the

I

Class

Limit

in

place

at

the

time

such

amounts

were

paid;

or

(2)

the

current

I

Class

Limit.

However,

no

repayment

will

be

made

more

than

three

years

after

the

date

of

a

payment

or

waiver.

T.

ROWE

PRICE

Capital

Appreciation

Fund

65

In

addition,

the

fund

has

entered

into

service

agreements

with

Price

Associates

and

two

wholly

owned

subsidiaries

of

Price

Associates,

each

an

affiliate

of

the

fund

(collectively,

Price).

Price

Associates

provides

certain

accounting

and

administrative

services

to

the

fund.

T.

Rowe

Price

Services,

Inc.

provides

shareholder

and

administrative

services

in

its

capacity

as

the

fund’s

transfer

and

dividend-disbursing

agent.

T.

Rowe

Price

Retirement

Plan

Services,

Inc.

provides

subaccounting

and

recordkeeping

services

for

certain

retirement

accounts

invested

in

the

Investor

Class

and

Advisor Class.

For

the

year ended

December

31,

2022,

expenses

incurred

pursuant

to

these

service

agreements

were

$102,000 for

Price

Associates;

$7,953,000 for

T.

Rowe

Price

Services,

Inc.;

and

$1,434,000 for

T.

Rowe

Price

Retirement

Plan

Services,

Inc.

All

amounts

due

to

and

due

from

Price,

exclusive

of

investment

management

fees

payable,

are

presented

net

on

the

accompanying

Statement

of

Assets

and

Liabilities.

The fund

may

invest

its

cash

reserves

in

certain

open-end

management

investment

companies

managed

by

Price

Associates

and

considered

affiliates

of

the

fund:

the

T.

Rowe

Price

Government

Reserve

Fund

or

the

T.

Rowe

Price

Treasury

Reserve

Fund,

organized

as

money

market

funds

(together,

the

Price

Reserve

Funds).

The

Price

Reserve

Funds

are

offered

as

short-term

investment

options

to

mutual

funds,

trusts,

and

other

accounts

managed

by

Price

Associates

or

its

affiliates

and

are

not

available

for

direct

purchase

by

members

of

the

public.

Cash

collateral

from

securities

lending,

if

any,

is

invested

in

the

T.

Rowe

Price

Government

Reserve Fund. The

Price

Reserve

Funds

pay

no

investment

management

fees.

The

fund

may

also

invest

in

certain

other

T.

Rowe

Price

funds

(Price

Funds)

as

a

means

of

gaining

efficient

and

cost-effective

exposure

to

certain

markets.

The

fund

does

not

invest

for

the

purpose

of

exercising

management

or

control;

however,

investments

by

the

fund

may

represent

a

significant

portion

of

an

underlying

Price

Fund’s

net

assets.

Each

underlying

Price

Fund

is

an

open-end

management

investment

company

managed

by

Price

Associates

and

is

considered

an

affiliate

of

the

fund.

To

ensure

that

the

fund

does

not

incur

duplicate

management

fees

(paid

by

the

underlying

Price

Fund(s)

and

the

fund),

Price

Associates

has

agreed

to

permanently

waive

a

portion

of

its

management

fee

charged

to

the

fund

in

an

amount

sufficient

to

fully

offset

that

portion

of

management

I

Class

Expense

limitation/I

Class

Limit

0.05%

Expense

limitation

date

04/30/24

(Waived)/repaid

during

the

period

($000s)

$—

T.

ROWE

PRICE

Capital

Appreciation

Fund

66

fees

paid

by

each

underlying

Price

Fund

related

to

the

fund’s

investment

therein.

Annual

management

fee

rates

and

amounts

waived

related

to

investments

in

the

underlying

Price

Fund(s)

for

the

year

ended

December

31,

2022,

are

as

follows:

Total

management

fee

waived

was

allocated

ratably

in

the

amounts

of

$2,384,000,

$56,000

and

$1,504,000

for

the

Investor

Class,

Advisor

Class,

and

I

Class,

respectively,

for

the

year ended

December

31,

2022. 

As

of

December

31,

2022,

T.

Rowe

Price

Group,

Inc.,

or

its

wholly

owned

subsidiaries,

owned

2,548,278

shares

of

the

Investor

Class,

representing

less

than

1%

of

the

Investor

Class's

net

assets,

and

3,405,025

shares

of

the

I

Class,

representing

less

than

1%

of

the

I

Class's

net

assets. 

The

fund may

participate

in

securities

purchase

and

sale

transactions

with

other

funds

or

accounts

advised

by

Price

Associates

(cross

trades),

in

accordance

with

procedures

adopted

by the

fund’s

Board

and

Securities

and

Exchange

Commission

rules,

which

require,

among

other

things,

that

such

purchase

and

sale

cross

trades

be

effected

at

the

independent

current

market

price

of

the

security.

During

the

year ended

December

31,

2022,

the

fund

had

no

purchases

or

sales

cross

trades

with

other

funds

or

accounts

advised

by

Price

Associates.

Price

Associates

has

voluntarily

agreed

to

reimburse

the

fund

from

its

own

resources

on

a

monthly

basis

for

the

cost

of

investment

research

embedded

in

the

cost

of

the

fund’s

securities

trades

and

for

the

cost

of

brokerage

commissions

embedded

in

the

cost

of

the

fund’s

foreign

currency

transactions.

These

agreements

may

be

rescinded

at

any

time.

For

the

year ended

December

31,

2022,

these

reimbursements

amounted

to

$2,131,000,

which

is

included

in

Net

realized

gain

(loss)

on

Securities

in

the

Statement

of

Operations.

($000s)

Effective

Management

Fee

Rate

Management

Fee

Waived

T.

Rowe

Price

Institutional

Floating

Rate

Fund

–

Institutional

Class

0.55%

$

3,944‌

Total

Management

Fee

Waived

$

3,944‌

T.

ROWE

PRICE

Capital

Appreciation

Fund

67

NOTE

8

-

OTHER

MATTERS

Unpredictable

events

such

as

environmental

or

natural

disasters,

war,

terrorism,

pandemics,

outbreaks

of

infectious

diseases,

and

similar

public

health

threats

may

significantly

affect

the

economy

and

the

markets

and

issuers

in

which

the fund

invests.

Certain

events

may

cause

instability

across

global

markets,

including

reduced

liquidity

and

disruptions

in

trading

markets,

while

some

events

may

affect

certain

geographic

regions,

countries,

sectors,

and

industries

more

significantly

than

others,

and

exacerbate

other

pre-existing

political,

social,

and

economic

risks.

Since

2020,

a

novel

strain

of

coronavirus

(COVID-19)

has

resulted

in

disruptions

to

global

business

activity

and

caused

significant

volatility

and

declines

in

global

financial

markets.

In

February

2022,

Russian

forces

entered

Ukraine

and

commenced

an

armed

conflict

leading

to

economic

sanctions

being

imposed

on

Russia

and

certain

of

its

citizens,

creating

impacts

on

Russian-related

stocks

and

debt

and

greater

volatility

in

global

markets.

These

are

recent

examples

of

global

events

which

may

have

a

negative

impact

on

the

values

of

certain

portfolio

holdings

or

the

fund’s

overall

performance.

Management

is

actively

monitoring

the

risks

and

financial

impacts

arising

from

these

events.

T.

ROWE

PRICE

Capital

Appreciation

Fund

68

REPORT

OF

INDEPENDENT

REGISTERED

PUBLIC

ACCOUNTING

FIRM

To

the

Board

of

Directors

and

Shareholders

of

T.

Rowe

Price

Capital

Appreciation

Fund,

Inc.

Opinion

on

the

Financial

Statements

We

have

audited

the

accompanying

statement

of

assets

and

liabilities,

including

the

portfolio

of

investments,

of

T.

Rowe

Price

Capital

Appreciation

Fund,

Inc.

(the

"Fund")

as

of

December

31,

2022,

the

related

statement

of

operations

for

the

year

ended

December

31,

2022,

the

statement

of

changes

in

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2022,

including

the

related

notes,

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2022

(collectively

referred

to

as

the

“financial

statements”).

In

our

opinion,

the

financial

statements

present

fairly,

in

all

material

respects,

the

financial

position

of

the

Fund

as

of

December

31,

2022,

the

results

of

its

operations

for

the

year

then

ended,

the

changes

in

its

net

assets

for

each

of

the

two

years

in

the

period

ended

December

31,

2022

and

the

financial

highlights

for

each

of

the

five

years

in

the

period

ended

December

31,

2022

in

conformity

with

accounting

principles

generally

accepted

in

the

United

States

of

America.

Basis

for

Opinion

These

financial

statements

are

the

responsibility

of

the

Fund’s

management.

Our

responsibility

is

to

express

an

opinion

on

the

Fund’s

financial

statements

based

on

our

audits.

We

are

a

public

accounting

firm

registered

with

the

Public

Company

Accounting

Oversight

Board

(United

States)

(PCAOB)

and

are

required

to

be

independent

with

respect

to

the

Fund

in

accordance

with

the

U.S.

federal

securities

laws

and

the

applicable

rules

and

regulations

of

the

Securities

and

Exchange

Commission

and

the

PCAOB.

We

conducted

our

audits

of

these

financial

statements

in

accordance

with

the

standards

of

the

PCAOB.

Those

standards

require

that

we

plan

and

perform

the

audit

to

obtain

reasonable

assurance

about

whether

the

financial

statements

are

free

of

material

misstatement,

whether

due

to

error

or

fraud.

T.

ROWE

PRICE

Capital

Appreciation

Fund

69

Our

audits

included

performing

procedures

to

assess

the

risks

of

material

misstatement

of

the

financial

statements,

whether

due

to

error

or

fraud,

and

performing

procedures

that

respond

to

those

risks.

Such

procedures

included

examining,

on

a

test

basis,

evidence

regarding

the

amounts

and

disclosures

in

the

financial

statements.

Our

audits

also

included

evaluating

the

accounting

principles

used

and

significant

estimates

made

by

management,

as

well

as

evaluating

the

overall

presentation

of

the

financial

statements.

Our

procedures

included

confirmation

of

securities

owned

as

of

December

31,

2022

by

correspondence

with

the

custodian,

transfer

agent

and

brokers;

when

replies

were

not

received

from

brokers,

we

performed

other

auditing

procedures.

We

believe

that

our

audits

provide

a

reasonable

basis

for

our

opinion.   

PricewaterhouseCoopers

LLP

Baltimore,

Maryland

February

16,

2023

We

have

served

as

the

auditor

of

one

or

more

investment

companies

in

the

T.

Rowe

Price

group

of

investment

companies

since

1973

REPORT

OF

INDEPENDENT

REGISTERED

PUBLIC

ACCOUNTING

FIRM

(continued)

T.

ROWE

PRICE

Capital

Appreciation

Fund

70

TAX

INFORMATION

(UNAUDITED)

FOR

THE

TAX

YEAR

ENDED 12/31/22

We

are

providing

this

information

as

required

by

the

Internal

Revenue

Code.

The

amounts

shown

may

differ

from

those

elsewhere

in

this

report

because

of

differences

between

tax

and

financial

reporting

requirements.

The

fund’s

distributions

to

shareholders

included:

$25,324,000 from

short-term

capital

gains 

$3,601,930,000 from

long-term

capital

gains,

subject

to

a

long-term

capital

gains

tax

rate

of

not

greater

than

20%

For

taxable

non-corporate

shareholders,

$333,068,000 of

the

fund's

income

represents

qualified

dividend

income

subject

to

a

long-term

capital

gains

tax

rate

of

not

greater

than

20%.

For

corporate

shareholders,

$294,109,000

of

the

fund's

income

qualifies

for

the

dividends-received

deduction.  

For

shareholders

subject

to

interest

expense

deduction

limitation

under

Section

163(j), $477,209,000 of

the

fund’s

income

qualifies

as

a

Section

163(j)

interest

dividend

and

can

be

treated

as

interest

income

for

purposes

of

Section

163(j),

subject

to

holding

period

requirements

and

other

limitations.

INFORMATION

ON

PROXY

VOTING

POLICIES,

PROCEDURES,

AND

RECORDS

A

description

of

the

policies

and

procedures

used

by

T.

Rowe

Price

funds

to

determine

how

to

vote

proxies

relating

to

portfolio

securities

is

available

in

each

fund’s

Statement

of

Additional

Information.

You

may

request

this

document

by

calling

1-800-225-5132

or

by

accessing

the

SEC’s

website,

sec.gov.

The

description

of

our

proxy

voting

policies

and

procedures

is

also

available

on

our

corporate

website.

To

access

it,

please

visit

the

following

Web

page:

https://www.troweprice.com/corporate/us/en/utility/policies.html

Scroll

down

to

the

section

near

the

bottom

of

the

page

that

says,

“Proxy

Voting

Guidelines.”

Click

on

the

links

in

the

shaded

box.

Each

fund’s

most

recent

annual

proxy

voting

record

is

available

on

our

website

and

through

the

SEC’s

website.

To

access

it

through

T.

Rowe

Price,

visit

the

website

location

shown

above,

and

scroll

down

to

the

section

near

the

bottom

of

the

page

that

says,

“Proxy

Voting

Records.”

Click

on

the

Proxy

Voting

Records

link

in

the

shaded

box.

T.

ROWE

PRICE

Capital

Appreciation

Fund

71

HOW

TO

OBTAIN

QUARTERLY

PORTFOLIO

HOLDINGS

The

fund

files

a

complete

schedule

of

portfolio

holdings

with

the

Securities

and

Exchange

Commission

(SEC)

for

the

first

and

third

quarters

of

each

fiscal

year

as

an

exhibit

to

its

reports

on

Form

N-PORT.

The

fund’s

reports

on

Form

N-PORT

are

available

electronically

on

the

SEC’s

website

(sec.gov).

In

addition,

most

T.

Rowe

Price

funds

disclose

their

first

and

third

fiscal

quarter-end

holdings

on

troweprice.com

.

T.

ROWE

PRICE

Capital

Appreciation

Fund

72

LIQUIDITY

RISK

MANAGEMENT

PROGRAM

In

accordance

with

Rule

22e-4

(Liquidity

Rule)

under

the

Investment

Company

Act

of

1940,

as

amended,

the

fund

has

established

a

liquidity

risk

management

program

(Liquidity

Program)

reasonably

designed

to

assess

and

manage

the

fund’s

liquidity

risk,

which

generally

represents

the

risk

that

the

fund

would

not

be

able

to

meet

redemption

requests

without

significant

dilution

of

remaining

investors’

interests

in

the

fund.

The

fund’s

Board

of

Directors

(Board)

has

appointed

the

fund’s

investment

adviser,

T.

Rowe

Price

Associates,

Inc.

(Adviser),

as

the

administrator

of

the

Liquidity

Program.

As

administrator,

the

Adviser

is

responsible

for

overseeing

the

day-to-day

operations

of

the

Liquidity

Program

and,

among

other

things,

is

responsible

for

assessing,

managing,

and

reviewing

with

the

Board

at

least

annually

the

liquidity

risk

of

each

T.

Rowe

Price

fund.

The

Adviser

has

delegated

oversight

of

the

Liquidity

Program

to

a

Liquidity

Risk

Committee

(LRC),

which

is

a

cross-functional

committee

composed

of

personnel

from

multiple

departments

within

the

Adviser.

The

Liquidity

Program’s

principal

objectives

include

supporting

the

T.

Rowe

Price

funds’

compliance

with

limits

on

investments

in

illiquid

assets

and

mitigating

the

risk

that

the

fund

will

be

unable

to

timely

meet

its

redemption

obligations.

The

Liquidity

Program

also

includes

a

number

of

elements

that

support

the

management

and

assessment

of

liquidity

risk,

including

an

annual

assessment

of

factors

that

influence

the

fund’s

liquidity

and

the

periodic

classification

and

reclassification

of

a

fund’s

investments

into

categories

that

reflect

the

LRC’s

assessment

of

their

relative

liquidity

under

current

market

conditions.

Under

the

Liquidity

Program,

every

investment

held

by

the

fund

is

classified

at

least

monthly

into

one

of

four

liquidity

categories

based

on

estimations

of

the

investment’s

ability

to

be

sold

during

designated

time

frames

in

current

market

conditions

without

significantly

changing

the

investment’s

market

value.

As

required

by

the

Liquidity

Rule,

at

a

meeting

held

on

July

25,

2022,

the

Board

was

presented

with

an

annual

assessment

prepared

by

the

LRC,

on

behalf

of

the

Adviser,

that

addressed

the

operation

of

the

Liquidity

Program

and

assessed

its

adequacy

and

effectiveness

of

implementation,

including

any

material

changes

to

the

Liquidity

Program

and

the

determination

of

each

fund’s

Highly

Liquid

Investment

Minimum

(HLIM).

The

annual

assessment

included

consideration

of

the

following

factors,

as

applicable:

the

fund’s

investment

strategy

and

liquidity

of

portfolio

investments

during

normal

and

reasonably

foreseeable

stressed

conditions,

including

whether

the

investment

strategy

is

appropriate

for

an

open-end

fund,

the

extent

to

which

the

strategy

involves

a

relatively

concentrated

portfolio

or

large

positions

in

particular

issuers,

and

the

use

of

borrowings

for

investment

purposes

and

derivatives;

short-term

and

long-term

cash

flow

projections

covering

both

normal

and

reasonably

foreseeable

stressed

conditions;

and

holdings

of

cash

and

cash

equivalents,

as

well

as

available

borrowing

arrangements.

T.

ROWE

PRICE

Capital

Appreciation

Fund

73

For

the

fund

and

other

T.

Rowe

Price

funds,

the

annual

assessment

incorporated

a

report

related

to

a

fund’s

holdings,

shareholder

and

portfolio

concentration,

any

borrowings

during

the

period,

cash

flow

projections,

and

other

relevant

data

for

the

period

of

April

1,

2021,

through

March

31,

2022.

The

report

described

the

methodology

for

classifying

a

fund’s

investments

(including

any

derivative

transactions)

into

one

of

four

liquidity

categories,

as

well

as

the

percentage

of

a

fund’s

investments

assigned

to

each

category.

It

also

explained

the

methodology

for

establishing

a

fund’s

HLIM

and

noted

that

the

LRC

reviews

the

HLIM

assigned

to

each

fund

no

less

frequently

than

annually.

During

the

period

covered

by

the

annual

assessment,

the

LRC

has

concluded,

and

reported

to

the

Board,

that

the

Liquidity

Program

continues

to

operate

adequately

and

effectively

and

is

reasonably

designed

to

assess

and

manage

the

fund’s

liquidity

risk.

LIQUIDITY

RISK

MANAGEMENT

PROGRAM

(continued)

T.

ROWE

PRICE

Capital

Appreciation

Fund

74

ABOUT

THE

FUND'S

DIRECTORS

AND

OFFICERS

Your

fund

is

overseen

by

a

Board

of

Directors

(Board)

that

meets

regularly

to

review

a

wide

variety

of

matters

affecting

or

potentially

affecting

the

fund,

including

performance,

investment

programs,

compliance

matters,

advisory

fees

and

expenses,

service

providers,

and

business

and

regulatory

affairs.

The

Board

elects

the

fund’s

officers,

who

are

listed

in

the

final

table.

The

directors

who

are

also

employees

or

officers

of

T.

Rowe

Price

are

considered

to

be

“interested”

directors

as

defined

in

Section

2(a)(19)

of

the

1940

Act

because

of

their

relationships

with

T.

Rowe

Price

and

its

affiliates.

The

business

address

of

each

director

and

officer

is

100

East

Pratt

Street,

Baltimore,

Maryland

21202.

The

Statement

of

Additional

Information

includes

additional

information

about

the

fund

directors

and

is

available

without

charge

by

calling

a

T.

Rowe

Price

representative

at

1-800-638-5660.

INDEPENDENT

DIRECTORS

(a)

Name

(Year

of

Birth)

Year

Elected

[Number

of

T.

Rowe

Price

Portfolios

Overseen]

Principal

Occupation(s)

and

Directorships

of

Public

Companies

and

Other

Investment

Companies

During

the

Past

Five

Years

Teresa

Bryce

Bazemore

(1959)

2018

[205]

President

and

Chief

Executive

Officer,

Federal

Home

Loan

Bank

of

San

Francisco

(2021

to

present);

President,

Radian

Guaranty

(2008

to

2017);

Chief

Executive

Officer,

Bazemore

Consulting

LLC

(2018

to

2021);

Director,

Chimera

Investment

Corporation

(2017

to

2021);

Director,

First

Industrial

Realty

Trust

(2020

to

present);

Director,

Federal

Home

Loan

Bank

of

Pittsburgh

(2017

to

2019)

Ronald

J.

Daniels

(b)

(1959)

2018

[0]

President,

The

Johns

Hopkins

University

and

Professor,

Political

Science

Department,

The

Johns

Hopkins

University

(2009

to

present);

Director,

Lyndhurst

Holdings

(2015

to

present);

Director,

BridgeBio

Pharma,

Inc.

(2020

to

present)

Bruce

W.

Duncan

(1951)

2013

[205]

President,

Chief

Executive

Officer,

and

Director,

CyrusOne,

Inc.

(2020

to

2021);

Chief

Executive

Officer

and

Director

(2009

to

2016),

Chair

of

the

Board

(2016

to

2020),

and

President

(2009

to

2016),

First

Industrial

Realty

Trust,

owner

and

operator

of

industrial

properties;

Chair

of

the

Board

(2005

to

2016)

and

Director

(1999

to

2016),

Starwood

Hotels

&

Resorts,

a

hotel

and

leisure

company;

Member,

Investment

Company

Institute

Board

of

Governors

(2017

to

2019);

Member,

Independent

Directors

Council

Governing

Board

(2017

to

2019);

Senior

Advisor,

KKR

(2018

to

present);

Director,

Boston

Properties

(2016

to

present);

Director,

Marriott

International,

Inc.

(2016

to

2020)

Robert

J.

Gerrard,

Jr.

(1952)

2012

[205]

Advisory

Board

Member,

Pipeline

Crisis/Winning

Strategies,

a

collaborative

working

to

improve

opportunities

for

young

African

Americans

(1997

to

2016);

Chair

of

the

Board,

all

funds

(July

2018

to

present)

T.

ROWE

PRICE

Capital

Appreciation

Fund

75

INTERESTED  DIRECTORS

(a)

Name

(Year

of

Birth)

Year

Elected

[Number

of

T.

Rowe

Price

Portfolios

Overseen]

Principal

Occupation(s)

and

Directorships

of

Public

Companies

and

Other

Investment

Companies

During

the

Past

Five

Years

Paul

F.

McBride

(1956)

2013

[205]

Advisory

Board

Member,

Vizzia

Technologies

(2015

to

present);

Board

Member,

Dunbar

Armored

(2012

to

2018)

Kellye

L.

Walker

(c)

(1966)

2021

[205]

Executive

Vice

President

and

Chief

Legal

Officer,

Eastman

Chemical

Company

(April

2020

to

present);

Executive

Vice

President

and

Chief

Legal

Officer,

Huntington

Ingalls

Industries,

Inc.

(January

2015

to

March

2020);

Director,

Lincoln

Electric

Company

(October

2020

to

present)

(a)

All

information

about

the

independent

directors

was

current

as

of

December

31,

2021,

unless

otherwise

indicated,

except

for

the

number

of

portfolios

overseen,

which

is

current

as

of

the

date

of

this

report.

(b)

Effective

April

27,

2022,

Mr.

Daniels

resigned

from

his

role

as

an

independent

director

of

the

Price

Funds.

(c)

Effective

November

8,

2021,

Ms.

Walker

was

appointed

as

an

independent

director

of

the

Price

Funds.

Name

(Year

of

Birth)

Year

Elected

[Number

of

T.

Rowe

Price

Portfolios

Overseen]

Principal

Occupation(s)

and

Directorships

of

Public

Companies

and

Other

Investment

Companies

During

the

Past

Five

Years

David

Oestreicher

(1967)

2018

[205]

Director,

Vice

President,

and

Secretary,

T.

Rowe

Price,

T.

Rowe

Price

Investment

Services,

Inc.,

T.

Rowe

Price

Retirement

Plan

Services,

Inc.,

and

T.

Rowe

Price

Services,

Inc.;

Director

and

Secretary,

T.

Rowe

Price

Investment

Management,

Inc.

(Price

Investment

Management);

Vice

President

and

Secretary,

T.

Rowe

Price

International

(Price

International);

Vice

President,

T.

Rowe

Price

Hong

Kong

(Price

Hong

Kong),

T. Rowe

Price

Japan

(Price

Japan),

and

T.

Rowe

Price

Singapore

(Price

Singapore);

General

Counsel,

Vice

President,

and

Secretary,

T.

Rowe

Price

Group,

Inc.;

Chair

of

the

Board,

Chief

Executive

Officer,

President,

and

Secretary,

T.

Rowe

Price

Trust

Company;

Principal

Executive

Officer

and

Executive

Vice

President,

all

funds

Robert

W.

Sharps,

CFA,

CPA

(b)

(1971)

2017

[0]

Director

and

Vice

President,

T.

Rowe

Price;

Director,

Price

Investment

Management;

Chief

Executive

Officer

and

President,

T.

Rowe

Price

Group,

Inc.;

Vice

President,

T.

Rowe

Price

Trust

Company

INDEPENDENT

DIRECTORS

(a)

(CONTINUED)

T.

ROWE

PRICE

Capital

Appreciation

Fund

76

OFFICERS

Name

(Year

of

Birth)

Year

Elected

[Number

of

T.

Rowe

Price

Portfolios

Overseen]

Principal

Occupation(s)

and

Directorships

of

Public

Companies

and

Other

Investment

Companies

During

the

Past

Five

Years

Eric

L.

Veiel,

CFA

(1972)

2022

[205]

Director

and

Vice

President,

T.

Rowe

Price;

Vice

President,

T.

Rowe

Price

Group,

Inc.,

and

T.

Rowe

Price

Trust

Company

(a)

All

information

about

the

interested

directors

was

current

as

of

January

1,

2022,

unless

otherwise

indicated,

except

for

the

number

of

portfolios

overseen,

which

is

current

as

of

the

date

of

this

report.

(b)

Effective

February

3,

2022,

Mr.

Sharps

resigned

from

his

role

as

an

interested

director

of

the

Price

Funds.

Name

(Year

of

Birth)

Position

Held

With

Capital

Appreciation

Fund

Principal

Occupation(s) 

Armando

(Dino)

Capasso

(1974)

Chief

Compliance

Officer

Chief

Compliance

Officer

and

Vice

President,

T.

Rowe

Price

and

Price

Investment

Management;

Vice

President,

T.

Rowe

Price

Group,

Inc.;

formerly,

Chief

Compliance

Officer,

PGIM

Investments

LLC

and

AST

Investment

Services,

Inc.

(ASTIS)

(to

2022);

Chief

Compliance

Officer,

PGIM

Retail

Funds

complex

and

Prudential

Insurance

Funds

(to

2022);

Vice

President

and

Deputy

Chief

Compliance

Officer,

PGIM

Investments

LLC

and

ASTIS

(to

2019);

Senior

Vice

President

and

Senior

Counsel,

Pacific

Investment

Management

Company

LLC

(to

2017) 

Paul

Cho

(1986)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Alan

S.

Dupski,

CPA

(1982)

Principal

Financial

Officer,

Vice

President,

and

Treasurer

Vice

President,

Price

Investment

Management,

T.

Rowe

Price,

T.

Rowe

Price

Group,

Inc.,

and

T.

Rowe

Price

Trust

Company

Donald

J.

Easley,

CFA

(1971)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Matthew

Frustaci

(1990)

Vice

President

Vice

President,

Price

Investment

Management;

formerly

student,

The

Wharton

School,

University

of

Pennsylvania

(to

2020);

summer

intern,

T.

Rowe

Price

(2019);

Finance

and

Strategy

Manager,

CircleCI

(to

2018)

Unless

otherwise

noted,

officers

have

been

employees

of

T.

Rowe

Price

or

Price

International

for

at

least

5

years.

INTERESTED  DIRECTORS

(a)

(CONTINUED)

T.

ROWE

PRICE

Capital

Appreciation

Fund

77

Name

(Year

of

Birth)

Position

Held

With

Capital

Appreciation

Fund

Principal

Occupation(s) 

David

R.

Giroux,

CFA

(1975)

President

Vice

President,

Price

Investment

Management,

T.

Rowe

Price

Group,

Inc.,

and

T.

Rowe

Price

Trust

Company

Gary

J.

Greb

(1961)

Vice

President

Vice

President,

Price

Investment

Management,

T.

Rowe

Price,

Price

International,

and

T.

Rowe

Price

Trust

Company

Cheryl

Hampton,

CPA

(1969)

Vice

President

Vice

President,

T.

Rowe

Price;

formerly,

Tax

Director,

Invesco

Ltd.

(to

2021);

Vice

President,

Oppenheimer

Funds,

Inc.

(to

2019)

Benjamin

Kersse,

CPA

(1989)

Vice

President

Vice

President,

T.

Rowe

Price

Steven

D.

Krichbaum

(1977)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Paul

J.

Krug,

CPA

(1964)

Vice

President

Vice

President,

T.

Rowe

Price,

T.

Rowe

Price

Group,

Inc.,

and

T.

Rowe

Price

Trust

Company

Kevin

Patrick

Loome,

CFA

(1967)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Fran

M.

Pollack-Matz

(1961)

Vice

President

and

Secretary 

Vice

President,

T.

Rowe

Price,

T.

Rowe

Price

Group,

Inc.,

T.

Rowe

Price

Investment

Services,

Inc.,

and

T.

Rowe

Price

Services,

Inc.

Vivek

Rajeswaran

(1985)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Shannon

H.

Rauser

(1987)

Assistant

Secretary 

Assistant

Vice

President,

T.

Rowe

Price

Nathan

Segal

(1985)

Vice

President

Vice

President,

Price

Investment

Management;

formerly,

student,

The

Graduate

School

of

Business,

Stanford

University

(to

2020);

summer

intern,

T.

Rowe

Price

(2019);

Charles

P.

Bonini

Fellow,

Eli

Lilly

(to

2018)

Farris

G.

Shuggi

(1984)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Mike

Signore

(1987)

Vice

President

Vice

President,

Price

Investment

Management

Brian

Solomon,

CFA

(1986)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Matthew

Stevenson

(1991)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.;

formerly

student,

Columbia

Business

School

(to

2019)

Unless

otherwise

noted,

officers

have

been

employees

of

T.

Rowe

Price

or

Price

International

for

at

least

5

years.

OFFICERS

(CONTINUED)

T.

ROWE

PRICE

Capital

Appreciation

Fund

78

Name

(Year

of

Birth)

Position

Held

With

Capital

Appreciation

Fund

Principal

Occupation(s) 

Chen

Tian

(1993)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Megan

Warren

(1968)

Vice

President

OFAC

Sanctions

Compliance

Officer

and

Vice

President,

Price

Investment

Management;

Vice

President,

T.

Rowe

Price,

T.

Rowe

Price

Group,

Inc.,

T.

Rowe

Price

Retirement

Plan

Services,

Inc.,

T.

Rowe

Price

Services,

Inc.,

and

T.

Rowe

Price

Trust

Company

Tamara

P.

Wiggs 

(1979)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Jon

Davis

Wood,

CFA

(1979)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Ashley

R.

Woodruff,

CFA

(1979)

Vice

President

Vice

President,

Price

Investment

Management

and

T.

Rowe

Price

Group,

Inc.

Unless

otherwise

noted,

officers

have

been

employees

of

T.

Rowe

Price

or

Price

International

for

at

least

5

years.

OFFICERS

(CONTINUED)

T.

Rowe

Price

Investment

Services,

Inc.

|

100

East

Pratt

Street

|

Baltimore,

MD

21202-1009

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fees,

expenses,

and

other

information

that

you

should

read

and

consider

carefully

before

investing.

All

mutual

funds

are

subject

to

market

risk,

including

possible

loss

of

principal.

Investing

internationally

involves

special

risks

including

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Rowe

Price

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investment

management

program

provided

by

T.

Rowe

Price

Advisory

Services,

Inc.,

a

registered

investment

adviser

under

the

Investment

Advisers

Act

of

1940.

Brokerage

services

are

provided

by

T.

Rowe

Price

Investment

Services,

Inc.,

member

FINRA/SIPC.

Brokerage

accounts

are

carried

by

Pershing

LLC,

a

BNY

Mellon

Company,

member

NYSE/FINRA/SIPC.

T.

Rowe

Price

Advisory

Services,

Inc.,

and

T.

Rowe

Price

Investment

Services,

Inc.,

are

affiliated

companies.

2

Brokerage

services

are

provided

by

T.

Rowe

Price

Investment

Services,

Inc.,

member

FINRA/SIPC.

Brokerage

accounts

are

carried

by

Pershing

LLC,

a

BNY

Mellon

Company,

member

NYSE/FINRA/SIPC.

202302-2582057

F72-050

2/23

Item 1. (b) Notice pursuant to Rule 30e-3.

Not applicable.

Item 2. Code of Ethics.

The registrant has adopted a code of ethics, as defined in Item 2 of Form N-CSR, applicable to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. A copy of this code of ethics is filed as an exhibit to this Form N-CSR. No substantive amendments were approved or waivers were granted to this code of ethics during the period covered by this report.

Item 3. Audit Committee Financial Expert.

The registrant’s Board of Directors has determined that Ms. Teresa Bryce Bazemore qualifies as an audit committee financial expert, as defined in Item 3 of Form N-CSR. Ms. Bazemore is considered independent for purposes of Item 3 of Form N-CSR.

Item 4. Principal Accountant Fees and Services.

(a) – (d)    Aggregate fees billed for the last two fiscal years for professional services rendered to, or on behalf of, the registrant by the registrant’s principal accountant were as follows:

	2022		2021
Audit Fees	$	41,909	$	40,759
Audit-Related Fees		-		-
Tax Fees		-		5,742
All Other Fees		-		-

Audit fees include amounts related to the audit of the registrant’s annual financial statements and services normally provided by the accountant in connection with statutory and regulatory filings. Audit-related fees include amounts reasonably related to the performance of the audit of the registrant’s financial statements and specifically include the issuance of a report on internal controls and, if applicable, agreed-upon procedures related to fund acquisitions. Tax fees include amounts related to services for tax compliance, tax planning, and tax advice. The nature of these services specifically includes the review of distribution calculations and the preparation of Federal, state, and excise tax returns. All other fees include the registrant’s pro-rata share of amounts for agreed-upon procedures in conjunction with service contract approvals by the registrant’s Board of Directors/Trustees.

(e)(1) The registrant’s audit committee has adopted a policy whereby audit and non-audit services performed by the registrant’s principal accountant for the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant require pre-approval in advance at regularly scheduled audit committee meetings. If such a service is required between regularly scheduled audit committee meetings, pre-approval may be authorized by one audit committee member with ratification at the next scheduled audit committee meeting. Waiver of pre-approval for audit or non-audit services requiring fees of a de minimis amount is not permitted.

  (2) No services included in (b) – (d) above were approved pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Less than 50 percent of the hours expended on the principal accountant’s engagement to audit the registrant’s financial statements for the most recent fiscal year were attributed to work performed by persons other than the principal accountant’s full-time, permanent employees.

(g) The aggregate fees billed for the most recent fiscal year and the preceding fiscal year by the registrant’s principal accountant for non-audit services rendered to the registrant, its investment adviser, and any entity controlling, controlled by, or under common control with the investment adviser that provides ongoing services to the registrant were $2,037,000 and $3,732,000, respectively.

(h) All non-audit services rendered in (g) above were pre-approved by the registrant’s audit committee. Accordingly, these services were considered by the registrant’s audit committee in maintaining the principal accountant’s independence.

Item 5. Audit Committee of Listed Registrants.

Not applicable.

Item 6. Investments.

(a) Not applicable. The complete schedule of investments is included in Item 1 of this Form N-CSR.

(b) Not applicable.

Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8. Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10. Submission of Matters to a Vote of Security Holders.

There has been no change to the procedures by which shareholders may recommend nominees to the registrant’s board of directors.

Item 11. Controls and Procedures.

(a) The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of this filing and have concluded that the registrant’s disclosure controls and procedures were effective, as of that date, in ensuring that information required to be disclosed by the registrant in this Form N-CSR was recorded, processed, summarized, and reported timely.

(b) The registrant’s principal executive officer and principal financial officer are aware of no change in the registrant’s internal control over financial reporting that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting.

Item 12. Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.

Not applicable.

Item 13. Exhibits.

(a)(1)	The registrant’s code of ethics pursuant to Item 2 of Form N-CSR is attached.
(2)	Separate certifications by the registrant’s principal executive officer and principal financial officer, pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(a) under the Investment Company Act of 1940, are attached.
(3)	Written solicitation to repurchase securities issued by closed-end companies: not applicable.
(b)	A certification by the registrant’s principal executive officer and principal financial officer, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 and required by Rule 30a-2(b) under the Investment Company Act of 1940, is attached.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

T. Rowe Price Capital Appreciation Fund, Inc.

By	/s/ David Oestreicher
	David Oestreicher
	Principal Executive Officer
Date	February 16, 2023

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By	/s/ David Oestreicher
	David Oestreicher
	Principal Executive Officer
Date	February 16, 2023
By	/s/ Alan S. Dupski
	Alan S. Dupski
	Principal Financial Officer
Date	February 16, 2023