PRUDENTIAL GROWTH OPPORTUNITY FUND INC, 485APOS, 1995-10-20

PRUDENTIAL GROWTH OPPORTUNITY FUND INC
485APOS, 1995-10-20

Previous: ULTRAK INC, S-4, 1995-10-20

Next: GENENTECH INC, 8-A12B, 1995-10-20

<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 20, 1995

REGISTRATION NO. 2-68723
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM N-1A

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933 /X/

PRE-EFFECTIVE AMENDMENT NO. / /

POST-EFFECTIVE AMENDMENT NO. 21 /X/

AND/OR

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 22 /X/
(Check appropriate box or boxes)
------------------------

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
(Exact name of registrant as specified in charter)

(Formerly Prudential-Bache Growth Opportunity Fund, Inc.)

ONE SEAPORT PLAZA,
NEW YORK, NEW YORK 10292
(Address of Principal Executive Offices)(Zip Code)

REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (212) 214-1250

S. JANE ROSE, ESQ.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292
(Name and Address of Agent for Service of Process)
Approximate date of proposed public offering:
As soon as practicable after the effective
date of the Registration Statement.
It is proposed that this filing will become effective
(check appropriate box):

/ / immediately upon filing pursuant to paragraph (b)

/ / on (date) pursuant to paragraph (b)

/ / 60 days after filing pursuant to paragraph (a)(1)

/X/ on January 2, 1996 pursuant to paragraph (a)(1)

/ / 75 days after filing pursuant to paragraph (a)(2)

/ / on (date) pursuant to paragraph (a)(2) of rule 485.

If appropriate, check the following box:

/ / this post-effective amendment designates a new
effective date for a previously filed post-effective
amendment.

Pursuant to Rule 24f-2 under the Investment Company Act of 1940, Registrant
has previously registered an indefinite number of shares of its Common Stock,
par value $.01 per share. The Registrant filed a notice under such Rule for its
fiscal year ended September 30, 1994 on November 25, 1994.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ----------------------------------------------- ----------------------------------
<S> <C> <C> <C>
PART A
Item 1. Cover Page........................ Cover Page
Item 2. Synopsis.......................... Fund Expenses
Item 3. Condensed Financial Information... Fund Expenses; Financial
Highlights; How the Fund
Calculates Performance
Item 4. General Description of Cover Page; Fund Highlights; How
Registrant........................ the Fund Invests; General
Information
Item 5. Management of the Fund............ Financial Highlights; How the Fund
is Managed
Item 6. Capital Stock and Other Taxes, Dividends and
Securities........................ Distributions; General Information
Item 7. Purchase of Securities Being Shareholder Guide; How the Fund
Offered........................... Values its Shares
Item 8. Redemption or Repurchase.......... Shareholder Guide; How the Fund
Values its Shares; General
Information
Item 9. Pending Legal Proceedings......... Not Applicable

PART B
Item 10. Cover Page........................ Cover Page
Item 11. Table of Contents................. Table of Contents
Item 12. General Information and History... General Information
Item 13. Investment Objectives and Investment Objective and Policies;
Policies.......................... Investment Restrictions
Item 14. Management of the Fund............ Directors and Officers; Manager;
Distributor
Item 15. Control Persons and Principal Not Applicable
Holders of Securities.............
Item 16. Investment Advisory and Other Manager; Distributor; Custodian,
Services.......................... Transfer and Dividend Disbursing
Agent and Independent Accountants
Item 17. Brokerage Allocation and Other Portfolio Transactions and
Practices......................... Brokerage
Item 18. Capital Stock and Other Not Applicable
Securities........................
Item 19. Purchase, Redemption and Pricing Purchase and Redemption of Fund
of Securities Being Offered....... Shares; Shareholder Investment
Account; Net Asset Value
Item 20. Tax Status........................ Taxes
Item 21. Underwriters...................... Distributor
Item 22. Calculation of Performance Data... Performance Information
Item 23. Financial Statements.............. Financial Statements

PART C
Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Post-Effective Amendment
to the Registration Statement.
</TABLE>
<PAGE>
Prudential Growth Opportunity Fund, Inc.

(Class Z Shares)

- ----------------------------------------------------------------

PROSPECTUS DATED JANUARY 2, 1996

- ----------------------------------------------------------------

Prudential Growth Opportunity Fund, Inc. (the Fund) is an open-end, diversified
management investment company whose objective is capital growth. The Fund
intends to invest principally in a carefully selected portfolio of common
stocks--generally small company stocks having prospects of a high return on
equity, increasing earnings, increasing dividends (or an expectation of
dividends) and price-earnings ratios which are not excessive. The Fund's
purchase and sale of put and call options and related short-term trading may
result in a high portfolio turnover rate. These activities may be considered
speculative and may result in higher risks and costs to the Fund. The Fund may
also buy and sell stock index futures and may buy and sell options on stock
indices in accordance with limits described herein. There can be no assurance
that the Fund's investment objective will be achieved. See "How the Fund
Invests--Investment Objective and Policies." The Fund's address is One Seaport
Plaza, New York, New York 10292, and its telephone number is (800) 225-1852.

Class Z shares are offered exclusively for sale to the Trustee of the Prudential
Securities 401(k) Plan, a defined contribution plan sponsored by Prudential
Securities Incorporated (the PSI 401(k) Plan or the Plan). Only Class Z shares
are offered through this Prospectus. The Fund also offers Class A, Class B and
Class C shares through the attached Prospectus dated February 1, 1995 (the
Retail Class Prospectus) which is a part hereof.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Additional information about
the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated February 1, 1995, which information
is incorporated herein by reference (is legally considered a part of this
Prospectus) and is available without charge upon request to the Fund, at the
address or telephone number noted above.

- --------------------------------------------------------------------------------

INVESTORS ARE ADVISED TO READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.
- --------------------------------------------------------------------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<PAGE>
FUND EXPENSES
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES CLASS Z SHARES
---------------
<S> <C>
Maximum Sales Load Imposed on Purchases (as a percentage of offering price)................. None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested Dividends.................. None
Deferred Sales Load (as a percentage of original purchase price or redemption proceeds,
whichever is lower)....................................................................... None
Redemption Fees............................................................................ None
Exchange Fee............................................................................... None

<CAPTION>
ANNUAL FUND OPERATING EXPENSES CLASS Z SHARES*
---------------
<S> <C>
(as a percentage of average net assets)
Management Fees............................................................................ .70%
12b-1 Fees................................................................................. None
Other Expenses............................................................................. .39%
---------------
Total Fund Operating Expenses.............................................................. 1.09%
---------------
---------------
</TABLE>

<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ------- -------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:
Class Z*.............................................................................. $ 11 $ 35 $ 60 $ 133
The above example is based on expenses expected to have been incurred if Class Z shares had been in existence during the fiscal
year ended September 30, 1994. THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES
MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist investors in understanding the various costs and expenses that an investor in Class Z
shares of the Fund will bear, whether directly or indirectly. For more complete descriptions of the various costs and expenses,
see "How the Fund is Managed." "Other Expenses" includes operating expenses of the Fund, such as directors' and professional
fees, registration fees, reports to shareholders, transfer agency and custodian fees and franchise taxes.
<FN>

--------------
*Estimated based on expenses expected to have been incurred if Class Z shares
had been in existence during the fiscal year ended September 30,1994.
</TABLE>

2
<PAGE>
THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND IS MANAGED--DISTRIBUTOR"
IN THE RETAIL CLASS PROSPECTUS:

Prudential Securities serves as the Distributor of Class Z shares and incurs
the expenses of distributing the Fund's Class Z shares under a Distribution
Agreement with the Fund, none of which is reimbursed by or paid for by the Fund.

THE FOLLOWING INFORMATION SUPPLEMENTS "HOW THE FUND VALUES ITS SHARES" IN
THE RETAIL CLASS PROSPECTUS:

The NAV of Class Z shares will generally be higher than the NAV of Class A,
Class B or Class C shares as a result of the fact that Class Z shares are not
subject to any distribution and/or service fee. It is expected, however, that
the NAV of the four classes will tend to converge immediately after the
recording of dividends, which will differ by approximately the amount of the
distribution-related accrual differential among the classes.

THE FOLLOWING INFORMATION SUPPLEMENTS "TAXES, DIVIDENDS AND
DISTRIBUTIONS--TAXATION OF SHAREHOLDERS" IN THE RETAIL CLASS PROSPECTUS:

As a qualified plan, the PSI 401(k) Plan generally pays no federal income
tax. Individual participants in the Plan should consult Plan documents and their
own tax advisers for information on the tax consequences associated with
participating in the PSI 401(k) Plan.

The per share dividends on Class Z shares will generally be higher than the
per share dividends on Class A, Class B or Class C shares as a result of the
fact that Class Z shares are not subject to any distribution or service fee.

THE FOLLOWING INFORMATION REPLACES THE INFORMATION UNDER "SHAREHOLDER
GUIDE--HOW TO BUY SHARES OF THE FUND" AND "SHAREHOLDER GUIDE--HOW TO SELL YOUR
SHARES" IN THE RETAIL CLASS PROSPECTUS:

Class Z shares of the Fund are offered exclusively for sale to the Trustee
of the PSI 401(k) Plan. Such shares may be purchased or redeemed only by the
Plan on behalf of individual plan participants at NAV without any sales or
redemption charge. Class Z shares are not subject to any minimum investment
requirements. The Plan purchases and redeems shares to implement the investment
choices of individual plan participants with respect to their contributions in
the Plan. All purchases through the Plan will be for Class Z shares. Individual
Plan participants should consult Plan documents for a description of the
procedures and limitations applicable to the making or changing of investment
choices. Copies of the Plan documents are available from the Prudential
Securities Benefits Department at One Seaport Plaza, 33rd Floor, New York, New
York 10292 or by calling (212) 214-7194.

The average net asset value per share at which shares of the Fund are
purchased or redeemed by the Plan for the accounts of individual plan
participants might be more or less than the net asset value per share prevailing
at the time that such participants made their investment choices or made their
contributions to the Plan.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER GUIDE--HOW TO EXCHANGE
YOUR SHARES" IN THE RETAIL CLASS PROSPECTUS:

Effective as of the date of this Prospectus, Class A shares held through the
PSI 401(k) Plan on behalf of participants will be automatically exchanged for
Class Z shares. You should contact the Prudential Securities Benefits Department
about how to exchange your Class Z shares. See "How to Buy Shares of the Fund"
above.

THE INFORMATION ABOVE ALSO SUPPLEMENTS THE INFORMATION UNDER "FUND
HIGHLIGHTS" IN THE RETAIL CLASS PROSPECTUS AS APPROPRIATE.

3
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
SUPPLEMENT DATED JANUARY 2, 1996 TO
PROSPECTUS DATED FEBRUARY 1, 1995

THE FOLLOWING INFORMATION SUPPLEMENTS "FINANCIAL HIGHLIGHTS" IN THE PROSPECTUS:

FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE PERIOD INDICATED)
(CLASS A, CLASS B AND CLASS C SHARES)

The following financial highlights for Class A, Class B and Class C shares
are unaudited. This information should be read in conjunction with the
financial statements and the notes thereto, which appear in the Statement of
Additional Information. The financial highlights contain selected data for a
Class A, Class B and Class C share of common stock, respectively, outstanding,
total return, ratios to average net assets and other supplemental data for the
period indicated. The information has been determined based on data contained
in the financial statements.

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
----------- ----------- -----------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED MARCH ENDED MARCH ENDED MARCH
31, 1995** 31, 1995** 31, 1995**
----------- ----------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................. $ 12.40 $ 11.99 $ 11.99
----------- ----------- -----------
INCOME FROM INVESTMENT OPERATIONS
Net investment income............... .02 (.03) (.03)
Net realized and unrealized gain
(loss) on investment
transactions....................... .50 .47 .47
----------- ----------- -----------
Total from investment operations.... .52 .44 .44
----------- ----------- -----------
LESS DISTRIBUTIONS
Dividends from net investment
income............................. -- -- --
Distributions from net realized
capital gains...................... (.84 ) (.84 ) (.84 )
----------- ----------- -----------
Total distributions................. (.84 ) (.84 ) (.84 )
----------- ----------- -----------
Net asset value, end of period...... $ 12.08 $ 11.59 $ 11.59
----------- ----------- -----------
----------- ----------- -----------
TOTAL RETURN#:...................... 5.03 % 4.60 % 4.60 %
RATIOS/SUPPLEMENTAL DATA:*
Net assets, end of period (000)..... $ 203,557 $ 315,089 $ 789
Average net assets (000)............ $ 124,937 $ 363,502 $ 494
Ratios to average net assets:
Expenses, including distribution
fees............................. 1.37 % 2.12 % 2.12 %
Expenses, excluding distribution
fees............................. 1.12 % 1.12 % 1.12 %
Net investment income............. .15 % (.60 )% (.60 )%
Portfolio turnover.................. 30 % 30 % 30 %
<FN>

------------------
*Annualized.
**Calculated based upon weighted average shares outstanding during the
period.
#Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
</TABLE>

THE FOLLOWING INFORMATION SUPPLEMENTS "GENERAL INFORMATION--DESCRIPTION OF
COMMON STOCK" IN THE PROSPECTUS:

The Fund is authorized to offer 1 billion shares of common stock, $.01 par
value per share, divided into four classes of shares, designated Class A, Class
B, Class C and Class Z shares, each consisting of 250 million authorized shares.
Each class represents an interest in the same assets of the Fund and is
identical in all respects except that
<PAGE>
(i) each class is subject to different sales charges and distribution and/or
service fees (except for Class Z shares, which are not subject to any
distribution and/or service fee), (ii) each class has exclusive voting rights
with respect to its distribution and service plan, if any, and on any other
matter submitted to shareholders that relates solely to its arrangement and has
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class, (iii) each
class has a different exchange privilege, (iv) only Class B shares have a
conversion feature and (v) Class Z shares are not subject to any sales or
redemption charge and are offered exclusively for sale to the Trustee of the
Prudential Securities 401(k) Plan, a defined contribution plan sponsored by
Prudential Securities. Since Class B and Class C shares generally bear higher
distribution expenses than Class A shares, the liquidation proceeds to
shareholders of those classes are likely to be lower than to Class A
shareholders and to Class Z shareholders, whose shares are not subject to any
distribution and/or service fee. In accordance with the Fund's Articles of
Incorporation, the Board of Directors may authorize the creation of additional
series and classes within such series, with such preferences, privileges,
limitations and voting and dividend rights as the Directors may determine.
Currently, the Fund is offering four classes, designated Class A, Class B, Class
C and Class Z shares.

THE FOLLOWING INFORMATION FOR THE CLASS Z SHARES SUPPLEMENTS "HOW THE FUND
CALCULATES PERFORMANCE" IN THE PROSPECTUS:

The Fund will include performance data for each class of shares offered
through the Prospectus in any advertisement or information including performance
data of the Fund.
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
Supplement dated January 2, 1996 to
Statement of Additional Information dated
February 1, 1995

THE FOLLOWING INFORMATION SUPPLEMENTS "DIRECTORS AND OFFICERS" IN THE STATEMENT
OF ADDITIONAL INFORMATION:

As of September 22, 1995, the Directors and officers of the Fund, as a
group, owned less than 1% of the outstanding common stock of the Fund.

As of September 22, 1995, Prudential Securities was the record holder for
other beneficial owners of 7,163,211 Class A shares (or 42% of the outstanding
Class A shares), 18,986,293 Class B shares (or 71% of the outstanding Class B
shares) and 89,476 Class C shares (or 79% of the outstanding Class C shares) of
the Fund. In the event of any meetings of shareholders, Prudential Securities
will forward, or cause the forwarding of, proxy materials to the beneficial
owners for which it is the record holder.

THE FOLLOWING INFORMATION SUPPLEMENTS "DISTRIBUTOR" IN THE STATEMENT OF
ADDITIONAL INFORMATION:

THE FOLLOWING INFORMATION SUPPLEMENTS "PURCHASE AND REDEMPTION OF FUND SHARES"
IN THE STATEMENT OF ADDITIONAL INFORMATION:

Shares of the Fund may be purchased at a price equal to the next determined
net asset value per share plus a sales charge which, at the election of the
investor, may be imposed either (i) at the time of purchase (Class A shares) or
(ii) on a deferred basis (Class B or Class C shares). Class Z shares of the Fund
are not subject to any sales or redemption charge and are offered exclusively
for sale to the Trustee of the Prudential Securities 401(k) Plan, a defined
contribution plan sponsored by Prudential Securities (the PSI 401(k) Plan). See
"Shareholder Guide--How to Buy Shares of the Fund" in the Prospectus.

Each class represents an interest in the same assets of the Fund and is
identical in all respects except that (i) each class is subject to different
sales charges and distribution and/or service expenses (except for Class Z
shares, which are not subject to any sales or redemption charge or any
distribution and/or service fee), (ii) each class has exclusive voting rights
with respect to its distribution and service plan, if any, and on any other
matter submitted to shareholders that relates solely to its arrangement and has
separate voting rights on any matter submitted to shareholders in which the
interests of one class differ from the interests of any other class, (iii) each
class has a different exchange privilege, (iv) only Class B shares have a
conversion feature and (v) Class Z shares are offered exclusively for sale to
the Trustee of the PSI 401(k) Plan. See "Distributor." Each class also has
separate exchange privileges. See "Shareholder Investment Account--Exchange
Privilege."

1
<PAGE>
SPECIMEN PRICE MAKE-UP SHEET

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold with a maximum sales charge of 5% and Class
B*, Class C* and Class Z** shares are sold at net asset value. Using the Fund's
net asset value at June 30, 1995, the maximum offering price of the Fund's
shares is as follows:

<TABLE>
<S> <C>
CLASS A
Net asset value and redemption price per Class A share................................... $ 12.08
Maximum sales charge (5% of offering price).............................................. .64
---------
Offering price to public................................................................. $ 12.72
---------
---------

CLASS B
Net asset value, offering price and redemption price per Class B share*.................. $ 11.59
---------
---------

CLASS C
Net asset value, offering price and redemption price per Class C share*.................. $ 11.59
---------
---------

CLASS Z
Net asset value, offering price and redemption price per Class Z share**................. $ 11.59
---------
---------
</TABLE>

- ------------
* Class B and Class C shares are subject to a contingent deferred sales charge
on certain redemptions. See "Shareholder Guide--How to Sell Your
Shares--Contingent Deferred Sales Charges" in the Prospectus.
** Class Z shares did not exist prior to January 2, 1996.

THE FOLLOWING INFORMATION SUPPLEMENTS "SHAREHOLDER INVESTMENT ACCOUNT--EXCHANGE
PRIVILEGE" IN THE STATEMENT OF ADDITIONAL INFORMATION:

CLASS Z. Class Z shares may be exchanged for Class Z shares of the funds
listed below which participate in the PSI 401(k) Plan. No fee or sales load will
be imposed upon the exchange.

Prudential Allocation Fund
(Balanced Portfolio)
Prudential Equity Income Fund
Prudential Equity Fund, Inc.
Prudential Global Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
(Money Market Series)
Prudential High Yield Fund, Inc.
Prudential MoneyMart Assets, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Utility Fund, Inc.

THE FOLLOWING INFORMATION SUPPLEMENTS "PERFORMANCE INFORMATION" IN THE
STATEMENT OF ADDITIONAL INFORMATION:

AVERAGE ANNUAL TOTAL RETURN. The Fund may from time to time advertise its
average annual total return. Average annual total return is determined
separately for Class A, Class B, Class C and Class Z shares. See "How the Fund
Calculates Performance" in the Prospectus.

The average annual total return for Class A shares for the one year and
since inception (January 22, 1990) periods ended March 31, 1995 was 3.9% and
12.6%, respectively. The average annual total return for Class B shares for the
one, five and ten year periods ended on March 31, 1995 was 3.5%, 12.7% and
12.1%, respectively. The average annual total return for Class C shares for the
inception (August 1, 1994) period ended March 31, 1995 was 6.9%. During these
periods, no Class Z shares were outstanding.

2
<PAGE>
AGGREGATE TOTAL RETURN. The Fund may also advertise its aggregate total
return. Aggregate total return is determined separately for Class A, Class B,
Class C and Class Z shares. See "How the Fund Calculates Performance" in the
Prospectus.

The aggregate total return for Class A shares for the one and five year and
since inception (January 22, 1990) periods ended on March 31, 1995 was 9.4%,
90.1% and 93.6%, respectively. The aggregate total return for Class B shares for
the one, five and ten year periods ended on March 31, 1995 was 8.5%, 82.4% and
212.1%, respectively. The aggregate total return for Class C shares for the
since inception (August 1, 1994) period ended March 31, 1995 was 7.9%. During
these periods, no Class Z shares were outstanding.

YIELD. The Fund may from time to time advertise its yield as calculated over
a 30-day period. Yield is calculated separately for Class A, Class B, Class C
shares and Class Z shares. The Fund's 30-day yields for the period ended March
31, 1995 were .46%, -.24% and -.23% for Class A, Class B and Class C shares,
respectively. During these periods, no Class Z shares were outstanding.

3
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. PORTFOLIO OF INVESTMENTS
MARCH 31, 1995 (UNAUDITED)

SHARES DESCRIPTION VALUE
(NOTE 1)
- --------------------------------------------------------------------------------
<S> <C> <C>

LONG-TERM INVESTMENTS
COMMON STOCKS--90.4%
AEROSPACE/DEFENSE--3.7%
740,000 Precision Castparts Corp. . . . . . . . . . . . . $ 19,332,500
------------

AUTOMOBILES--1.1%
250,000+ Jason, Inc.*
(cost $2,200,000; purchase date--1/21/94) . . . 1,996,875
190,000 Standard Products Co. . . . . . . . . . . . . . . 3,728,750
------------
5,725,625
------------

BANKING--1.4%
190,000 Community First Bankshares, Inc.. . . . . . . . . 2,945,000
200,000 Riggs National Corp.* . . . . . . . . . . . . . . 1,850,000
140,000 Rochester Community Savings Bank. . . . . . . . . 2,397,500
------------
7,192,500
------------

CABLE & PAY TELEVISION SYSTEMS--1.1%
217,000 TCA Cable TV, Inc.. . . . . . . . . . . . . . . . 5,669,125
------------

COMMERCIAL SERVICES--1.0%
193,700 Aviall, Inc.. . . . . . . . . . . . . . . . . . . 1,283,263
28,400 Banner Aerospace, Inc.* . . . . . . . . . . . . . 113,600
190,000 SafeCard Services, Inc. . . . . . . . . . . . . . 3,633,750
------------
5,030,613
------------

COMMUNICATIONS EQUIPMENT--0.9%
298,600 Black Box Corp* . . . . . . . . . . . . . . . . . 4,404,350
------------

COMPUTER HARDWARE--3.5%
310,000 Stratus Computer, Inc.* . . . . . . . . . . . . . 9,687,500
390,000 Telxon Corp.. . . . . . . . . . . . . . . . . . . 5,801,250
119,800 VeriFone, Inc.* . . . . . . . . . . . . . . . . . 2,935,100
------------
18,423,850
------------

COMPUTER SOFTWARE & SERVICES--5.0%
220,000 American Management Systems, Inc.*. . . . . . . . 4,262,500
49,800 Analysts International Corp.. . . . . . . . . . . 1,157,850
241,800 Continuum Co., Inc.*. . . . . . . . . . . . . . . 7,193,550
25,000 McAffee Associates, Inc.* . . . . . . . . . . . . 725,000
200,050 National Data Corp. . . . . . . . . . . . . . . . 3,475,869
275,000 Primark Corp.*. . . . . . . . . . . . . . . . . . 3,953,125
95,000 Sterling Software, Inc.*. . . . . . . . . . . . . 3,313,125
124,200 Westcott Communications, Inc.*. . . . . . . . . . 1,723,275
------------
25,804,294
------------

CONSUMER PRODUCTS--2.5%
35,300 Block Drug Co., Inc.. . . . . . . . . . . . . . . 1,235,500
275,000 Fedders Corp.*. . . . . . . . . . . . . . . . . . 1,478,125
550,000 Fedders USA, Inc.*. . . . . . . . . . . . . . . . 4,056,250
265,400 Libbey, Inc.. . . . . . . . . . . . . . . . . . . 4,943,075
75,000 Russ Berrie & Co., Inc. . . . . . . . . . . . . . 1,078,125
------------
12,791,075
------------

CONSUMER SERVICES--.8%
235,000 Regis Corp.*. . . . . . . . . . . . . . . . . . . 4,347,500
------------

CONTAINERS & PACKAGING--0.6%
24,200 AptarGroup Inc. . . . . . . . . . . . . . . . . . 692,725
127,800 Interpool, Inc.*. . . . . . . . . . . . . . . . . 1,853,100
32,200 U.S. Can Corp.* . . . . . . . . . . . . . . . . . 684,250
------------
3,230,075
------------

DRUGS & MEDICAL SUPPLIES--2.8%
70,000 Abbey Healthcare Group* . . . . . . . . . . . . . 2,563,750
248,400 Endosonics Corp.* . . . . . . . . . . . . . . . . 1,987,200
27,700 Healthdyne, Inc.* . . . . . . . . . . . . . . . . 283,925
14,800 Healthdyne Technologies, Inc.*. . . . . . . . . . 175,750
38,400 Heart Technology, Inc.* . . . . . . . . . . . . . 720,000
50,000 Marsam Pharmaceuticals, Inc.* . . . . . . . . . . 718,750
105,100 Sofamor/Danek Group, Inc.*. . . . . . . . . . . . 2,574,950
150,000 Sybron International Corp.* . . . . . . . . . . . 5,400,000
------------
14,424,325
------------

ELECTRICAL EQUIPMENT--0.8%
187,000 Belden, Inc.. . . . . . . . . . . . . . . . . . . 4,114,000
13,500 Cable Design Technologies Corp.*. . . . . . . . . 202,500
------------
4,316,500
------------

4 See Notes to Financial Statements
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

<CAPTION>
SHARES DESCRIPTION VALUE
(NOTE 1)
- --------------------------------------------------------------------------------
<S> <C> <C>

ELECTRONICS--7.9%
43,100 Actel Corp.*. . . . . . . . . . . . . . . . . . . $ 549,525
10,300 Advance Circuits, Inc.* . . . . . . . . . . . . . 142,913
108,100 Burr-Brown Corp.. . . . . . . . . . . . . . . . . 1,959,312
200,000 Cirrus Logic, Inc.* . . . . . . . . . . . . . . . 6,800,000
130,600 Kemet Corp.*. . . . . . . . . . . . . . . . . . . 4,913,825
425,000 Marshall Industries, Inc.*. . . . . . . . . . . . 11,050,000
505,000 Methode Electronics, Inc. . . . . . . . . . . . . 7,953,750
170,000 Woodhead Industries, Inc. . . . . . . . . . . . . 3,400,000
111,500 Zilog Inc.* . . . . . . . . . . . . . . . . . . . 3,986,125
------------
40,755,450
------------

ENGINEERING & CONSTRUCTION--0.3%
126,200 Baker (Michael) Corp.*. . . . . . . . . . . . . . 496,125
48,500 Valmont Industries, Inc.. . . . . . . . . . . . . 994,250
------------
1,490,375
------------

ENVIRONMENTAL SERVICES--1.1%
216,000 BHA Group, Inc. . . . . . . . . . . . . . . . . . 2,484,000
286,300 USA Waste Services, Inc.* . . . . . . . . . . . . 3,399,812
------------
5,883,812
------------

FINANCIAL SERVICES--1.1%
104,200 Finova Group Inc. . . . . . . . . . . . . . . . . 3,438,600
165,000 McDonald & Co. Investments, Inc.. . . . . . . . . 2,351,250
------------
5,789,850
------------

FOOD & BEVERAGES--3.6%
25,000 Dole Food Inc.. . . . . . . . . . . . . . . . . . 725,000
288,000 JP Foodservice Inc.*. . . . . . . . . . . . . . . 3,312,000
394,300 Michaels Foods, Inc.. . . . . . . . . . . . . . . 4,337,300
490,000 Rykoff-Sexton, Inc. . . . . . . . . . . . . . . . 7,717,500
207,000 Sanderson Farms, Inc. . . . . . . . . . . . . . . 2,432,250
------------
18,524,050
------------

FOREST PRODUCTS--2.7%
308,500 Mercer International, Inc.* . . . . . . . . . . . 4,473,250
150,200 Mosinee Paper Corp. . . . . . . . . . . . . . . . 4,092,950
107,500 Pentair, Inc. . . . . . . . . . . . . . . . . . . 4,541,875
47,900 Wausau Paper Mills Co.. . . . . . . . . . . . . . 1,065,775
------------
14,173,850
------------

HEALTH CARE SERVICES--0.8%
139,500 National Health Labs Hldgs.*. . . . . . . . . . . 2,092,500
450,000 Unilab Corp.* . . . . . . . . . . . . . . . . . . 2,306,250
------------
4,398,750
------------

HOSPITAL MANAGEMENT--2.5%
180,000 Coastal Healthcare Group, Inc.* . . . . . . . . . 4,905,000
233,700 Physician Corp. of America* . . . . . . . . . . . 5,258,250
11,300 Right CHOICE Managed Care*. . . . . . . . . . . . 203,400
112,200 Universal Health Services, Inc.*. . . . . . . . . 2,833,050
------------
13,199,700
------------

INDUSTRIALS--5.9%
70,700 Amcast Industrial Corp. . . . . . . . . . . . . . 1,414,000
130,500 Carlisle Companies, Inc.. . . . . . . . . . . . . 4,795,875
90,800 Figgie International, Inc.. . . . . . . . . . . . 817,200
21,900 Insituform Mid-America, Inc. . . . . . . . . . . 229,950
205,000 Johnstown America Industries, Inc.* . . . . . . . 2,767,500
250,000 Mark IV Industries, Inc.. . . . . . . . . . . . . 5,125,000
142,600 Medalist Industries, Inc.*. . . . . . . . . . . . 819,950
108,900 Rogers Corp.* . . . . . . . . . . . . . . . . . . 5,853,375
204,500 Schulman (A.), Inc. . . . . . . . . . . . . . . . 6,237,250
104,050 Varlen Corp.. . . . . . . . . . . . . . . . . . . 2,367,137
------------
30,427,237
------------

INFORMATION SERVICES--0.9%
210,000 American Business Information, Inc.*. . . . . . . 4,567,500
------------

5 See Notes to Financial Statements
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

SHARES DESCRIPTION VALUE
(NOTE 1)
- --------------------------------------------------------------------------------
<S> <C> <C>

INSURANCE--1.3%
166,000 AmVestors Financial Corp.*. . . . . . . . . . . . $ 1,743,000
120,000 Life Re Corp. . . . . . . . . . . . . . . . . . . 2,325,000
221,400 Philadelphia Consolidated Holding Corp.*. . . . . 2,767,500
------------
6,835,500
------------

LEISURE--0.9%
348,800 Topps Co., Inc. . . . . . . . . . . . . . . . . . 2,223,600
120,000 WMS Industries Inc.*. . . . . . . . . . . . . . . 2,490,000
------------
4,713,600
------------

MACHINERY & EQUIPMENT--7.3%
162,900 Bearings, Inc.. . . . . . . . . . . . . . . . . . 4,948,087
360,000 Brenco, Inc.. . . . . . . . . . . . . . . . . . . 4,545,000
126,100 GATX Corp.. . . . . . . . . . . . . . . . . . . . 5,642,975
160,000 Gerber Scientific, Inc. . . . . . . . . . . . . . 2,300,000
111,600 Maverick Tube Corp.*. . . . . . . . . . . . . . . 990,450
325,000 Measurex Corp.. . . . . . . . . . . . . . . . . . 8,084,375
440,000 Regal Beloit Corp.. . . . . . . . . . . . . . . . 6,875,000
161,400 Roper Industries. . . . . . . . . . . . . . . . . 4,337,625
------------
37,723,512
------------

MEDIA--0.5%
150,000 Valassis Communications, Inc.*. . . . . . . . . . 2,737,500
------------

NON-FERROUS METALS--0.1%
18,200 Cleveland-Cliffs Inc. . . . . . . . . . . . . . . 700,700
------------

OIL & GAS EXPLORATION/PRODUCTION--4.4%
30,800 Cabot Oil & Gas Corp. . . . . . . . . . . . . . . 487,256
120,000 Diamond Shamrock, Inc.. . . . . . . . . . . . . . 3,165,000
45,100 Dreyfus Natural Gas Corp.*. . . . . . . . . . . . 648,313
360,000 International Colin Energy Co.* . . . . . . . . . 2,025,000
270,814 KN Energy, Inc. . . . . . . . . . . . . . . . . . 6,499,536
135,700 Lomak Petroleum, Inc.*. . . . . . . . . . . . . . 949,900
300,100 Mesa, Inc.* . . . . . . . . . . . . . . . . . . . 1,838,112
103,400 Mitchell Energy & Dev. Corp., Class A . . . . . . 1,861,200
145,050 Mitchell Energy & Dev. Corp., Class B . . . . . . 2,556,506
120,000 Western Gas Resources, Inc. . . . . . . . . . . . 2,655,000
------------
22,685,823
------------

OIL SERVICES--0.8%
200,000 Dreco Energy Services Ltd.* . . . . . . . . . . . 2,550,000
225,000 Pride Petroleum Services, Inc.* . . . . . . . . . 1,546,875
------------
4,096,875
------------

PUBLISHING--0.3%
63,600 Central Newspapers, Inc.. . . . . . . . . . . . . 1,661,550
------------

REALTY--1.1%
100,000 Duke Reality Investments, Inc.. . . . . . . . . . 2,650,000
120,000 Equity Residential Property Trust . . . . . . . . 3,120,000
------------
5,770,000
------------

RESTAURANTS--0.2%
124,600 Buffets, Inc.*. . . . . . . . . . . . . . . . . . 1,183,700
------------

RETAIL--3.3%
726,480 Neostar Retail Group Inc.*. . . . . . . . . . . . 8,899,380
388,000 Stride Rite Corp. . . . . . . . . . . . . . . . . 4,898,500
110,000 Tiffany & Co. . . . . . . . . . . . . . . . . . . 3,410,000
------------
17,207,880
------------

SPECIALTY CHEMICALS--6.0%
300,800 Brush Wellman, Inc. . . . . . . . . . . . . . . . 5,301,600
250,000 Cabot Corp. . . . . . . . . . . . . . . . . . . . 9,218,750
75,000 Potash Corp.. . . . . . . . . . . . . . . . . . . 3,337,500
180,000 Raychem Corp. . . . . . . . . . . . . . . . . . . 7,312,500
155,000 Vigoro Corp.. . . . . . . . . . . . . . . . . . . 5,735,000
------------
30,905,350
------------

6 See Notes to Financial Statements
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

SHARES DESCRIPTION VALUE
(NOTE 1)
- --------------------------------------------------------------------------------
<S> <C> <C>

STEEL--5.4%
100,000 Huntco, Inc.. . . . . . . . . . . . . . . . . . . $ 2,025,000
10,200 Lukens, Inc.. . . . . . . . . . . . . . . . . . . 310,466
200,000 Quanex Corp.. . . . . . . . . . . . . . . . . . . 4,550,000
570,000 Trinity Industries, Inc.. . . . . . . . . . . . . 21,303,750
------------
28,189,216
------------

TRANSPORTATION--6.2%
246,250 Air Express International Corp. . . . . . . . . . 6,279,375
347,800 Expediters International of Washington, Inc.. . . 7,303,800
263,600 Harper Group, Inc.. . . . . . . . . . . . . . . . 4,613,000
335,000 Kansas City Southern Industries, Inc.*. . . . . . 13,609,375
66,700 WorldCorp, Inc.*. . . . . . . . . . . . . . . . . 641,988
------------
32,447,538
------------

TRUCKING & SHIPPING--0.5%
123,800 American President Cos., Ltd. . . . . . . . . . . 2,708,125
------------

UTILITY--0.1%
35,900 AES China Generating* . . . . . . . . . . . . . . 309,638
------------

Total common stocks (cost $415,251,201) . . . . . 469,779,413
------------

PRINCIPAL
AMOUNT
(000) SHORT-TERM INVESTMENT
- --------- REPURCHASE AGREEMENT--11.4%
$ 58,914 Joint Repurchase Agreement Account, 6.29%, 4/3/95,
(Note 5) (cost $58,914,000) . . . . . . . . . . 58,914,000
------------

TOTAL INVESTMENTS--101.8%
(cost $474,165,201; Note 4) . . . . . . . . . . 528,693,413
Liabilities in excess of other assets--(1.8%) . . (9,258,343)
------------
NET ASSETS--100%. . . . . . . . . . . . . . . . . $519,435,070
------------
------------

<FN>
- ---------------
* Non-income producing security.
+ Private placement restricted as to resale; includes registration rights
under which the Fund may demand registration by the issuer.

</TABLE>

7 See Notes to Financial Statements
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LABILITIES
(UNAUDITED)

MARCH 31, 1995
--------------
<S> <C>

ASSETS
Investments, at value (cost $474,165,201) . . . . . . . . . . $528,693,413
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29,317
Receivable for investments sold. . . . . . . . . . . . . . . 9,477,369
Receivable for Fund shares sold. . . . . . . . . . . . . . . 990,646
Dividends and interest receivable. . . . . . . . . . . . . . 577,341
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 16,332
------------
Total assets . . . . . . . . . . . . . . . . . . . . . . . 539,784,418
------------

LIABILITIES
Payable for investments purchased. . . . . . . . . . . . . . 15,684,800
Payable for Fund shares reacquired . . . . . . . . . . . . . 3,827,789
Distribution fee payable . . . . . . . . . . . . . . . . . . 302,772
Management fee payable . . . . . . . . . . . . . . . . . . . 299,911
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . 234,076
------------
Total liabilities. . . . . . . . . . . . . . . . . . . . . 20,349,348
------------

NET ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $519,435,070
------------
------------

Net assets were comprised of:
Common stock, at par . . . . . . . . . . . . . . . . . . . $ 440,983
Paid-in capital in excess of par . . . . . . . . . . . . . 456,076,824
------------
456,517,807
Undistributed net investment income. . . . . . . . . . . . 1,902,134
Accumulated net realized gain on investments . . . . . . . 6,486,917
Net unrealized appreciation on investments . . . . . . . . 54,528,212
------------
Net assets, March 31, 1995 . . . . . . . . . . . . . . . . . $519,435,070
------------
------------

Class A:
Net asset value and redemption price per share
($203,556,729 DIVIDED BY 16,854,425 shares of common
stock issued and outstanding). . . . . . . . . . . . . . $12.08
Maximum sales charge (5.0% of offering price). . . . . . . .64
------
Maximum offering price to public . . . . . . . . . . . . . $12.72
------
------

Class B:
Net asset value and redemption price per share
($315,089,405 DIVIDED BY 27,175,839 shares of common
stock issued and outstanding). . . . . . . . . . . . . . $11.59
------
------

Class C:
Net asset value, offering price and redemption price per share
($788,936 DIVIDED BY 68,045 shares of common
stock issued and outstanding). . . . . . . . . . . . . . $11.59
------
------

</TABLE>

See Notes to Financial Statements.

8
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS
(UNAUDITED)

SIX MONTHS
ENDED
MARCH 31,
1995
----------
<S> <C>

NET INVESTMENT LOSS
Income
Dividends (net of foreign withholding taxes of $6,227) . . . . $ 2,951,888
Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 839,628
-----------
Total income . . . . . . . . . . . . . . . . . . . . . . . . . 3,791,516
-----------

Expenses
Distribution fee--Class A. . . . . . . . . . . . . . . . . . . 155,743
Distribution fee--Class B. . . . . . . . . . . . . . . . . . . 1,812,531
Distribution fee--Class C. . . . . . . . . . . . . . . . . . . 2,463
Management fee . . . . . . . . . . . . . . . . . . . . . . . . 1,706,577
Transfer agent's fees and expenses . . . . . . . . . . . . . . 516,000
Reports to shareholders. . . . . . . . . . . . . . . . . . . . 185,000
Custodian's fees and expenses. . . . . . . . . . . . . . . . . 124,000
Registration fees. . . . . . . . . . . . . . . . . . . . . . . 117,000
Audit fee. . . . . . . . . . . . . . . . . . . . . . . . . . . 25,000
Franchise taxes. . . . . . . . . . . . . . . . . . . . . . . . 22,000
Directors' fees. . . . . . . . . . . . . . . . . . . . . . . . 15,000
Legal fees . . . . . . . . . . . . . . . . . . . . . . . . . . 15,000
Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . 10,401
-----------
Total expenses . . . . . . . . . . . . . . . . . . . . . . . . 4,706,715
-----------
Net investment loss. . . . . . . . . . . . . . . . . . . . . . . (915,199)
-----------

REALIZED AND UNREALIZED GAIN ON INVESTMENTS
Net realized gain on investment transactions . . . . . . . . . . 7,882,944
Net change in unrealized appreciation of investments . . . . . . 15,467,183
-----------
Net gain on investments. . . . . . . . . . . . . . . . . . . . . 23,350,127
-----------

NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS . . . . . . $22,434,928
-----------
-----------

</TABLE>

See Notes to Financial Statements.

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS
(UNAUDITED)

SIX MONTHS YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
1995 1994
---------- -------------
<S> <C> <C>

Operations
Net investment loss. . . . . . . . . . . . . . $ (915,199) $ (3,041,729)
Net realized gain on investments . . . . . . . 7,882,944 44,673,230
Net change in unrealized appreciation of
investments. . . . . . . . . . . . . . . . . 15,467,183 (38,737,408)
------------ ------------
Net increase in net assets resulting from
operations . . . . . . . . . . . . . . . . . 22,434,928 2,894,093
------------ ------------
Net equalization credits . . . . . . . . . . . . 1,457,753 70,234
------------ ------------
Distributions from net capital gains (Note 1)
Class A. . . . . . . . . . . . . . . . . . . . (6,672,537) (5,775,787)
Class B. . . . . . . . . . . . . . . . . . . . (28,252,159) (24,227,795)
Class C. . . . . . . . . . . . . . . . . . . . (23,735) --
------------ ------------
(34,948,431) (30,003,582)
------------ ------------
Fund share transactions (net of conversion)
(Note 6)
Net proceeds from shares subscribed. . . . . . 161,924,864 433,710,426
Net asset value of shares issued in
reinvestment of distributors . . . . . . . . 33,299,692 28,758,329
Cost of shares reacquired. . . . . . . . . . . (193,582,909) (377,490,019)
------------ ------------
Net increase in net assets from Fund share
transactions . . . . . . . . . . . . . . . . 1,641,647 84,978,736
------------ ------------
Total increase (decrease). . . . . . . . . . . . (9,414,103) 57,939,481

NET ASSETS
Beginning of period. . . . . . . . . . . . . . . 528,849,173 470,909,692
------------ ------------
End of period. . . . . . . . . . . . . . . . . . $519,435,070 $528,849,173
------------ ------------
------------ ------------

</TABLE>

See Notes to Financial Statements.

9
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)

Prudential Growth Opportunity Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to achieve capital
growth, consistent with reasonable risk, by investing in a carefully selected
portfolio of commons stocks having prospects of high return on equity,
increasing earnings, increasing dividends and price-earnings ratios which are
not excessive.

NOTE 1. ACCOUNTING POLICIES

The following is a summary of significant accounting policies followed by
the Fund in the preparation of its financial statements.

SECURITIES VALUATIONS: Investments traded in a national securities exchange are
valued at the least reported sales price on the primary exchange on which they
are traded. Securities traded in the over-the-counter market (including
securities listed on exchanges whose primary market is believed to be over-the-
counter) and listed securities for which no sale was reported on that date are
valued at the mean between the last reported bid and asked prices. Any
security for which a reliable market quotation is unavailable is valued at fair
value as determined in good faith by or under the direction of the Fund's Board
of Directors.

Short-term securities which mature in more than 60 days are valued based
upon current market quotations. Short-term securities which mature in 60 days
or less are valued at amortized cost.

In connection with transactions in repurchase agreements with U.S.
financial institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction, including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.

All securities are valued as of 4:15 P.M., New York time.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transaction are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date; interest income is recorded on the accrual basis.

Net investment income (loss), other than distribution fees, and unrealized
and realized gains or losses are allocated daily to each class of shares of the
Fund based upon the relative proportion of net assets of each class at the
beginning of the day.

FEDERAL INCOME TAXES: It is the Fund's policy to continue to meet the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute all of its taxable net income to its shareholders.
Therefore, no federal income tax provision is required.

EQUALIZATION: The Fund follows the accounting practice known as equalization,
by which a portion of the proceeds from sales and costs of reacquisitions of
Fund shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.

DIVIDENDS AND DISTRIBUTIONS: The Fund expects to pay dividends of net
investment income, if any, semi-annually and make distributions at least
annually of any net capital gains. Dividends and distributions are recorded on
the ex-dividend date.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.

RECLASSIFICATIONS OF CAPITAL ACCOUNTS: The Fund accounts and reports for
distributions to shareholders in accordance with AICPA Statement of Position 93-
2: Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
During the six months ended March 31, 1995, the Fund reclassified $915,199 of
net operating losses by increasing undistributed net investment income and
decreasing accumulated net realized gains. Net investment income, net realized
gains, and net assets were not affected by this change.

NOTE 2. AGREEMENTS

The Fund has a management agreement with Prudential Mutual Fund Management,
Inc. ("PMF"). Pursuant to this agreement, PMF has responsibility for all
investment advisory services and supervises the subadviser's performance of

10
<PAGE>

and services, PMF has entered into a subadvisory agreement with The Prudential
Investment Corporation ("PIC"); PIC furnishes investment advisory services in
connection with the management of the Fund. PMF pays for the cost of the
subadviser's services, the compensation of officers of the Fund, occupancy and
certain clerical and bookkeeping costs of the Fund. The Fund bears all other
costs and expenses.

The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .70 of 1% of the Fund's average daily net assets.

The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. ("PMFD"), which acts as the distributor of the Class A shares
of the Fund, and with Prudential Securities Incorporated ("PSI"), which acts as
distributor of the Class B and Class C shares of the Fund (collectively the
"Distributors"). The Fund compensates the Distributors for distributing and
servicing and Fund's Class A, Class B and Class C shares, pursuant to plans of
distribution, (the "Class A, B and C Plans"). The distribution fees are accrued
daily and payable monthly.

Pursuant to the Class A, B and C Plans, the Fund compensates the
Distributors for distribution-related activities at and annual rate of up to .30
of 1%, 1% and 1%, of the average daily net assets of the Class A, B and C
shares, respectively. Such expenses under the Plans were .25 of 1% of the
average daily net assets of Class A shares and 1% of the average daily net
assets of both the Class B and C shares for the period ended March 31, 1995.

PMFD has advised the Fund that is has received approximately $143,900 in
front-end sales charges resulting from sales of Class A shares during the six
months ended March 31, 1995. From these fees, PMFD paid such sales charges to
PSI and Pruco Securities Corporation, affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.

PSI had advised the Fund that for the six months ended March 31, 1995, it
received approximately $476,700 in contingent deferred sales charges imposed
upon certain redemptions by Class B shareholders.

PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are indirect
wholly-owned subsidiaries of The Prudential Insurance Company of America.

NOTE 3. OTHER TRANSACTIONS WITH AFFILIATES

Prudential Mutual Fund Services, Inc. ("PMFS"), a wholly-owned subsidiary
of PMF, serves as the Fund's transfer agent. During the six months ended
March 31, 1995, the Fund incurred fees of approximately $402,000 for the
services of PMFS. As of March 31, 1995, approximately $72,000 of such fees were
due to PMFS.

NOTE 4. PORTFOLIO SECURITIES

Purchases and sales of investment securities, other than short-term
investments, for the six months ended March 31, 1995 were $140,095,199 and
$196,788,467, respectively.

The federal income tax basis of the Fund's investments at March 31, 1995
was $474,361,144 and, accordingly, net unrealized appreciation for federal
income tax purposes was $54,528,212 (gross unrealized appreciation--$69,730,954
gross unrealized depreciation--$15,202,742).

NOTE 5. JOINT REPURCHASE AGREEMENT ACCOUNT

The Fund, along with other affiliated registered investment companies,
transfers uninvested cash balances into a single joint account, the daily
aggregate balance of which is invested in one or more repurchase agreements
collateralized by U.S. Treasury or federal agency obligations. As of March 31,
1995, the Fund had a 7.6% undivided interest in the repurchase agreements in the
joint account. The undivided interest for the Fund represented $58,914,000 in
principal amount. As of such date, each repurchase agreement in the joint
account and the collateral therefor were as follows:

Bear, Stearns & Co., Inc., 6.15%, in the principal amount of $30,000,000,
repurchase price $30,015,375, due 4/3/95. The value of the collateral including
accrued interest is $30,655,525.

First Boston Corp., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral
including accrued interest is $255,156,250.

Goldman Sachs & Co., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral
including accrued interest is $255,156,250.

Smith Barney, Inc., 6.30%, in the principal amount of $250,000,000,
repurchase price $250,131,250, due 4/3/95. The value of the collateral
including accrued interest is $255,156,250.

NOTE 6. CAPITAL

The Fund currently offers Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge of up to 5%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a contingent deferred sales charge of 1%

11
<PAGE>

during the first year. Commencing in February 1995, Class B shares
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase.

There are 750 million shares of common stock, $.01 par value per share,
divided into three classes, designated Class A, Class B and Class C common
stock, each of which consists of 250 million authorized shares.

Transactions in shares of common stock for the six months ended March 31,
1995 and the fiscal year ended September 30, 1994 were as follows:

SHARES AMOUNT
------------ --------------
<S> <C> <C>

CLASS A
- -------
Six months ended March 31, 1995:

Shares sold. . . . . . . . . . . . . . . . . . . 5,905,857 $ 69,345,203
Shares issued in reinvestment of
distributions. . . . . . . . . . . . . . . . . 614,029 6,502,568
Shares reacquired. . . . . . . . . . . . . . . . (6,382,008) (72,762,585)
----------- -------------
Net increase in shares outstanding before
conversion . . . . . . . . . . . . . . . . . . 137,878 3,085,186
Shares issued upon conversion from Class B . . . 8,405,246 90,525,645
----------- -------------
Net increase in shares outstanding . . . . . . . 8,543,124 $ 93,610,831
----------- -------------
----------- -------------

Year ended September 30, 1994:

Shares sold. . . . . . . . . . . . . . . . . . . 9,370,171 $ 115,130,689
Shares issued in reinvestment of
distributions. . . . . . . . . . . . . . . . . 467,222 5,644,046
Shares reacquired. . . . . . . . . . . . . . . . (8,789,620) (108,081,971)
----------- -------------
Net increase in shares outstanding . . . . . . . 1,047,773 $ 12,692,764
----------- -------------
----------- -------------

CLASS B
- -------
Six months ended March 31, 1995:
SHARES AMOUNT
------------ --------------
Shares sold. . . . . . . . . . . . . . . . . . . 8,252,743 $ 91,754,915
Shares issued in reinvestment of
distributions. . . . . . . . . . . . . . . . . 2,601,937 26,773,935
Shares reacquired. . . . . . . . . . . . . . . . (11,103,699) (120,472,557)
----------- -------------
Net increase in shares outstanding before
conversion . . . . . . . . . . . . . . . . . . (249,019) (1,943,707)
Shares reaquired upon conversion into Class A . . (8,075,336) (90,525,645)
----------- -------------
Net increase in shares outstanding . . . . . . . (8,324,355) $ (92,469,352
----------- -------------
----------- -------------

Year ended September 30, 1994:

Shares sold. . . . . . . . . . . . . . . . . . . 26,537,335 $ 318,270,570
Shares issued in reinvestment of
distributions. . . . . . . . . . . . . . . . . 1,960,499 23,114,283
Shares reacquired. . . . . . . . . . . . . . . . (22,525,818) (269,363,510)
----------- -------------
Net increase in shares outstanding . . . . . . . 5,972,016 $ 72,021,343
----------- -------------
----------- -------------

CLASS C
- -------
Six months ended March 31, 1995:

Shares sold. . . . . . . . . . . . . . . . . . . 74,170 $ 824,746
Shares issued in reinvestment of
distributions. . . . . . . . . . . . . . . . . 2,254 23,189
Shares reacquired. . . . . . . . . . . . . . . . (30,791) (347,767)
----------- -------------
Net increase in shares outstanding . . . . . . . 45,633 $ 500,168
----------- -------------
----------- -------------

August 1, 1994* through September 30, 1994:

Shares sold. . . . . . . . . . . . . . . . . . . 26,125 $ 309,167
Shares reacquired. . . . . . . . . . . . . . . . (3,713) (44,538)
----------- -------------
Net increase in shares outstanding . . . . . . . 22,412 $ 264,629
----------- -------------
----------- -------------

<FN>
- ---------------
* Commencement of offering of Class C shares.

</TABLE>

12
<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)

CLASS A
----------------------------------------------------------------------------
JANUARY 22,
SIX MONTHS 1990+
ENDED YEAR ENDED SEPTEMBER 30, THROUGH
MARCH 31, ------------------------------------------- SEPTEMBER 30,
1995** 1994** 1993** 1992** 1991 1990
---------- ---------- -------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period . . . . . . . $ 12.40 $ 13.06 $ 11.25 $ 10.16 $ 7.36 $ 8.55
--------- -------- ------- ------- ------- ---------

INCOME FROM INVESTMENT OPERATIONS
Net investment income. . . . . . . . . . . . . . . .02 -- .03 .02 .05 .09
Net realized and unrealized gain (loss) on
investment transactions. . . . . . . . . . . . . .50 .13 3.14 1.47 2.82 (1.20)
--------- -------- ------- ------- ------- ---------
Total from investment operations . . . . . . . . .52 .13 3.17 1.49 2.87 (1.11)
--------- -------- ------- ------- ------- ---------

LESS DISTRIBUTIONS
Dividends from net investment income . . . . . . . -- -- -- -- (.07) (.08)
Distributions from net realized capital gains . . . (.84) (.79) (1.36) (.40) -- --
--------- -------- ------- ------- ------- ---------
Total distributions. . . . . . . . . . . . . . . (.84) (.79) (1.36) (.40) (.07) (.08)
--------- -------- ------- ------- ------- ---------

Net asset value, end of period . . . . . . . . . . $ 12.08 $ 12.40 $ 13.06 $ 11.25 $ 10.16 $ 7.36
--------- -------- ------- ------- ------- ---------
--------- -------- ------- ------- ------- ---------

TOTAL RETURN#: . . . . . . . . . . . . . . . . . . 5.03% 1.13% 30.42% 15.39% 39.39% (13.19)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000). . . . . . . . . . $203,557 $103,078 $94,842 $44,845 $25,165 $ 17,222
Average net assets (000) . . . . . . . . . . . . . $124,937 $ 97,877 $69,801 $36,011 $20,650 $132,627
Ratios to average net assets:
Expenses, including distribution fees. . . . . . 1.37%* 1.33% 1.17% 1.33% 1.50% 1.61%*
Expenses, excluding distribution fees. . . . . . 1.12%* 1.09% .97% 1.13% 1.30% 1.42%*
Net investment income. . . . . . . . . . . . . . .15%* .00% .26% .19% .59% 1.54%*
Portfolio turnover . . . . . . . . . . . . . . . . 30% 82% 68% 99% 111% 79%

<FN>
- ---------------
* Annualized.
** Calculated based upon weighted average shares outstanding during the
period.
+ Commencement of offering of Class A shares.
# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.

</TABLE>

See Notes to Financial Statements.

13
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS
(UNAUDITED)

CLASS B
---------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
MARCH 31, ------------------------------------------------------------
1995** 1994** 1993** 1992** 1991 1990
---------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period . . . . . . . $ 11.99 $ 12.74 $ 11.08 $ 10.11 $ 7.34 $ 9.11
-------- -------- -------- -------- -------- --------

INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) . . . . . . . . . . . (.03) (.09) (.06) (.07) (.02) .07
Net realized and unrealized gain (loss) on
investment transactions. . . . . . . . . . . . . .47 .13 3.08 1.44 2.82 (1.75)
-------- -------- -------- -------- -------- --------
Total from investment operations . . . . . . . . .44 .04 3.02 1.37 2.80 (1.68)
-------- -------- -------- -------- -------- --------

LESS DISTRIBUTIONS
Dividends from net investment income . . . . . . . -- -- -- -- (.03) (.09)
Distributions from net realized capital gains . . . (.84) (.79) (1.36) (.40) -- --
-------- -------- -------- -------- -------- --------
Total distributions. . . . . . . . . . . . . . . (.84) (.79) (1.36) (.40) (.03) (.09)
-------- -------- -------- -------- -------- --------

Net asset value, end of period . . . . . . . . . . $ 11.59 $ 11.99 $ 12.74 $ 11.08 $ 10.11 $ 7.34
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------

TOTAL RETURN#: . . . . . . . . . . . . . . . . . . 4.60% .34% 29.40% 14.27% 38.33% (18.63)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000). . . . . . . . . . $315,089 $425,502 $376,068 $172,018 $118,660 $ 86,440
Average net assets (000) . . . . . . . . . . . . . $363,502 $399,920 $278,659 $154,601 $104,508 $132,622
Ratios to average net assets:
Expenses, including distribution fees. . . . . . 2.12%* 2.09% 1.97% 2.13% 2.30% 2.18%
Expenses, excluding distribution fees. . . . . . 1.12%* 1.09% .97% 1.13% 1.30% 1.28%
Net investment income (loss) . . . . . . . . . . (.60)% (.76)% (.54)% (.61)% (.21)% .91%
Portfolio turnover . . . . . . . . . . . . . . . . 30% 82% 68% 99% 111% 79%

CLASS C
--------------------------------
AUGUST 1,
SIX MONTHS 1994@
ENDED THROUGH
MARCH 31, SEPTEMBER 30,
1995** 1994**
---------- -------------
<S> <C> <C>

PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period . . . . . . . $11.99 $11.61
------ ------
INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss) . . . . . . . . . . . (.03) (.01)
Net realized and unrealized gain (loss) on
investment transactions. . . . . . . . . . . . . .47 .39
------ ------
Total from investment operations . . . . . . . . .44 .38
------ ------

LESS DISTRIBUTIONS
Dividends from net investment income . . . . . . . -- --
Distributions from net realized capital gains. . . (.84) --
------ ------
Total distributions. . . . . . . . . . . . . . . (.84) --
------ ------

Net asset value, end of period . . . . . . . . . . $11.59 $11.99
------ ------
------ ------

TOTAL RETURN#: . . . . . . . . . . . . . . . . . . 4.60% 3.19%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000). . . . . . . . . . $ 789 $ 269
Average net assets (000) . . . . . . . . . . . . . $ 494 $ 179
Ratios to average net assets:
Expenses, including distribution fees. . . . . . 2.12%* 2.22%*
Expenses, excluding distribution fees. . . . . . 1.12%* 1.22%*
Net investment income (loss) . . . . . . . . . . (.60)%* (.31)%*
Portfolio turnover . . . . . . . . . . . . . . . . 30% 82%

<FN>
- ---------------
* Annualized.
** Calculated based upon weighted average shares outstanding during the
period.
@ Commencement of offering of Class C shares.
# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.

</TABLE>

See Notes to Financial Statements.

14
<PAGE>
Prudential
Growth Opportunity Fund, Inc.

- ------------------------------------------

Prospectus dated February 1, 1995

- ----------------------------------------------------------------

- --------------------------------------------------------------------------------

INVESTORS ARE ADVISED TO READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE
REFERENCE.
- --------------------------------------------------------------------------------

The following summary is intended to highlight certain information contained
in this Prospectus and is qualified in its entirety by the more detailed
information appearing elsewhere herein.

What is Prudential Growth Opportunity Fund, Inc.?

Prudential Growth Opportunity Fund, Inc. is a mutual fund. A mutual fund pools
the resources of investors by selling its shares to the public and investing the
proceeds of such sale in a portfolio of securities designed to achieve its
investment objective. Technically, the Fund is an open-end, diversified
management investment company.

What is the Fund's Investment Objective?

The Fund's investment objective is capital growth. It seeks to achieve this
objective by investing primarily in a carefully selected portfolio of common
stocks--generally small company stocks having prospects of a high return on
equity, increasing earnings, increasing dividends (or an expectation of
dividends), and price-earnings ratios which are not excessive. There can be no
assurance that the Fund's objective will be achieved. See "How the Fund
Invests--Investment Objective and Policies" at page 8.

Risk Factors and Special Characteristics

In seeking to achieve its investment objective, the Fund has generally
invested in common stocks with smaller market capitalizations than those of the
stocks included in the Dow Jones Industrial Average or the largest stocks
included in the Standard & Poor's 500 Composite Stock Index. As a result, the
Fund's portfolio has generally been made up of common stocks issued by smaller,
less well known companies selected by the investment adviser on the basis of
fundamental investment analysis. Companies in which the Fund is likely to invest
may have limited product lines, markets or financial resources and may lack
management depth. The securities of these companies may have limited
marketability and may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general. See "How the Fund Invests--Investment Objective and Policies" at page
8. The Fund may also engage in various hedging and return enhancement
strategies, including derivatives. See "How the Fund Invests--Hedging and Return
Enhancement Strategies-- Risks of Hedging and Return Enhancement Strategies" at
page 9. In addition, the Fund may invest up to 15% of its total assets in
foreign securities. Investing in securities of foreign companies and countries
involves certain considerations and risks not typically associated with
investing in securities of domestic companies. See "How the Fund Invests--Other
Investments and Policies--Foreign Investments" at page 11.

Who Manages the Fund?

Prudential Mutual Fund Management, Inc. (PMF or the Manager) is the Manager of
the Fund and is compensated for its services at an annual rate of .70 of 1% of
the Fund's average daily net assets. As of December 31, 1994, PMF served as
manager or administrator to 69 investment companies, including 39 mutual funds,
with aggregate assets of approximately $47 billion. The Prudential Investment
Corporation (PIC or the Subadviser) furnishes investment advisory services in
connection with the management of the Fund under a Subadvisory Agreement with
PMF. See "How the Fund is Managed--Manager" at page 13.

Who Distributes the Fund's Shares?

Prudential Mutual Fund Distributors, Inc. (PMFD) acts as the Distributor of
the Fund's Class A shares and is paid an annual distribution and service fee
which is currently being charged at the rate of .25 of 1% of the average daily
net assets of the Class A shares.

Prudential Securities Incorporated (Prudential Securities or PSI), a major
securities underwriter and securities and commodities broker, acts as the
Distributor of the Fund's Class B and Class C shares and is paid an annual
distribution and service fee at the rate of 1% of the average daily net assets
of each of the Class B and Class C shares.

See "How the Fund is Managed--Distributor" at page 13.

2
<PAGE>
What is the Minimum Investment?

The minimum initial investment for Class A and Class B shares is $1,000 per
class and $5,000 for Class C shares. The minimum subsequent investment is $100
for all classes. There is no minimum investment requirement for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. For purchases made through the Automatic Savings Accumulation Plan, the
minimum initial and subsequent investment is $50. See "Shareholder Guide--How to
Buy Shares of the Fund" at page 19 and "Shareholder Guide--Shareholder Services"
at page 27.

How Do I Purchase Shares?

You may purchase shares of the Fund through Prudential Securities, Pruco
Securities Corporation (Prusec) or directly from the
Fund, through its transfer agent, Prudential Mutual Fund Services, Inc. (PMFS or
the Transfer Agent) at the net asset value per share (NAV) next determined after
receipt of your purchase order by the Transfer Agent or Prudential Securities
plus a sales charge which may be imposed either (i) at the time of purchase
(Class A shares) or (ii) on a deferred basis (Class B or Class C shares). See
"How the Fund Values its Shares" at page 16 and "Shareholder Guide--How to Buy
Shares of the Fund" at page 19.

What Are My Purchase Alternatives?

The Fund offers three classes of shares:

- Class A Shares: Sold with an initial sales charge of up to 5% of
the offering price.

- Class B Shares: Sold without an initial sales charge but are
subject to a contingent deferred sales charge or
CDSC (declining from 5% to zero of the lower of
the amount invested or the redemption proceeds)
which will be imposed on certain redemptions made
within six years of purchase. Although Class B
shares are subject to higher ongoing
distribution-related expenses than Class A shares,
Class B shares will automatically convert to Class
A shares (which are subject to lower ongoing
distribution-related expenses) approximately seven
years after purchase.

- Class C Shares: Sold without an initial sales charge and, for one
year after purchase, are subject to a 1% CDSC on
redemptions. Like Class B shares, Class C shares
are subject to higher ongoing distribution-related
expenses than Class A shares but do not convert to
another class.

See "Shareholder Guide--Alternative Purchase Plan" at page 20.

How Do I Sell My Shares?

You may redeem your shares at any time at the NAV next determined after
Prudential Securities or the Transfer Agent receives your sell order. However,
the proceeds of redemptions of Class B and Class C shares may be subject to a
CDSC. See "Shareholder Guide--How to Sell Your Shares" at page 23.

How Are Dividends and Distributions Paid?

The Fund expects to pay dividends of net investment income, if any,
semi-annually and make distributions of any net capital gains at least annually.
Dividends and distributions will be automatically reinvested in additional
shares of the Fund at NAV without a sales charge unless you request that they be
paid to you in cash. See "Taxes, Dividends and Distributions" at page 17.

3
<PAGE>
FUND EXPENSES
<TABLE>
<CAPTION>
Class A
Shareholder Transaction Expenses+ Shares Class B Shares Class C Shares
------------- -------------------------- ---------------------
<S> <C> <C> <C>
Maximum Sales Load Imposed on Purchases
(as a percentage of offering price)..... 5% None None
Maximum Sales Load or Deferred Sales Load
Imposed on Reinvested Dividends......... None None None
Deferred Sales Load (as a percentage of
original purchase price or redemption
proceeds, whichever is lower)........... None 5% during the first year, 1% on redemptions
decreasing by 1% annually made within one year
to 1% in the fifth and of purchase
sixth years and 0% the
seventh year*
Redemption Fees.......................... None None None
Exchange Fee............................. None None None

<CAPTION>
Class A
Annual Fund Operating Expenses Shares Class B Shares Class C Shares**
------------- -------------------------- ---------------------
<S> <C> <C> <C>
(as a percentage of average net assets)
Management Fees.......................... .70% .70% .70%
12b-1 Fees............................... .25++ 1.00 1.00
Other Expenses........................... .39 .39 .39
------------- -------------------------- ---------------------
Total Fund Operating Expenses............ 1.34% 2.09% 2.09%
------------- -------------------------- ---------------------
------------- -------------------------- ---------------------
</TABLE>

<TABLE>
<CAPTION>
Example 1 year 3 years 5 years 10 years
------- ------- -------- --------
<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000 investment, assuming (1) 5% annual return
and (2) redemption at the end of each time period:
Class A............................................................................... $ 63 $ 90 $ 120 $ 203
Class B............................................................................... $ 71 $ 95 $ 122 $ 214
Class C**............................................................................. $ 31 $ 65 $ 112 $ 242
You would pay the following expenses on the same investment, assuming no redemption:
Class A............................................................................... $ 63 $ 90 $ 120 $ 203
Class B............................................................................... $ 21 $ 65 $ 112 $ 214
Class C**............................................................................. $ 21 $ 65 $ 112 $ 242
The above example with respect to Class A and Class B shares is based on restated (Class A only) data for the Fund's fiscal year
ended September 30, 1994. The above example with respect to Class C shares is based on expenses expected to have been incurred
if Class C shares had been in existence during the entire fiscal year ended September 30, 1994. THE EXAMPLE SHOULD NOT BE
CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.
The purpose of this table is to assist investors in understanding the various costs and expenses that an investor in the Fund
will bear, whether directly or indirectly. For more complete descriptions of the various costs and expenses, see "How the Fund
is Managed." "Other Expenses" includes operating expenses of the Fund, such as directors' and professional fees, registration
fees, reports to shareholders, transfer agency and custodian fees and franchise taxes.
<FN>

------------------
*Class B shares will automatically convert to Class A shares approximately
seven years after purchase. See "Shareholder Guide--Conversion
Feature--Class B Shares."
**Estimated based on expenses expected to have been incurred if Class C
shares had been in existence during the entire fiscal year ended
September 30, 1994.
+Pursuant to rules of the National Association of Securities Dealers,
Inc., the aggregate initial sales charges, deferred sales charges and
asset-based sales charges on shares of the Fund may not exceed 6.25% of
total gross sales, subject to certain exclusions. This 6.25% limitation
is imposed on the Fund rather than on a per shareholder basis. Therefore,
long-term shareholders of the Fund may pay more in total sales charges
than the economic equivalent of 6.25% of such shareholders' investment in
such shares. See "How the Fund is Managed--Distributor."
++Although the Class A Distribution and Service Plan provides that the Fund
may pay a distribution fee of up to .30 of 1% per annum of the average
daily net assets of the Class A shares, the Distributor has agreed to
limit its distribution fees with respect to Class A shares of the Fund to
no more than .25 of 1% of the average daily net assets of the Class A
shares for the fiscal year ending September 30, 1995. Total operating
expenses without such limitation would be 1.39%. See "How the Fund is
Managed--Distributor."
</TABLE>

4
<PAGE>
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout each of the indicated periods)
(Class A Shares)

The following financial highlights have been audited by Price Waterhouse
LLP, independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the financial statements and
notes thereto, which appear in the Statement of Additional Information. The
following financial highlights contain selected data for a Class A share of
common stock outstanding, total return, ratios to average net assets and other
supplemental data for the periods indicated. The information is based on data
contained in the financial statements.

<TABLE>
<CAPTION>
January 22,
1990*
Year ended September 30, Through
------------------------------------------------- September 30,
1994*** 1993***/+ 1992***/+ 1991+ 1990+
------------- -------- -------- -------- ---------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period............................. $ 13.06 $ 11.25 $ 10.16 $ 7.36 $ 8.55
------------- -------- -------- -------- -------
Income from investment operations
Net investment income............... -- .03 .02 .05 .09
Net realized and unrealized gain
(loss) on investment
transactions....................... .13 3.14 1.47 2.82 (1.20)
------------- -------- -------- -------- -------
Total from investment operations.... .13 3.17 1.49 2.87 (1.11)
------------- -------- -------- -------- -------
Less distributions
Dividends from net investment
income............................. -- -- -- (.07) (.08)
Distributions from net realized
capital gains...................... (.79) (1.36) (.40) -- --
------------- -------- -------- -------- -------
Total distributions................. (.79) (1.36) (.40) (.07) (.08)
------------- -------- -------- -------- -------
Net asset value, end of period...... $ 12.40 $ 13.06 $ 11.25 $ 10.16 $ 7.36
------------- -------- -------- -------- -------
------------- -------- -------- -------- -------
TOTAL RETURN++:..................... 1.13% 30.42% 15.39% 39.39% (13.19)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)..... $ 103,078 $94,842 $44,845 $25,165 $17,222
Ratios to average net assets:
Expenses, including distribution
fees............................. 1.33% 1.17% 1.33% 1.50% 1.61%**
Expenses, excluding distribution
fees............................. 1.09% .97% 1.13% 1.30% 1.42%**
Net investment income (loss)...... .00% .26% .19% .59% 1.54%**
Portfolio turnover.................. 82% 68% 99% 111% 79%
<FN>

------------------
*Commencement of offering of Class A shares.
**Annualized.
***Calculated based upon weighted average shares outstanding during the
period.
+Restated to reflect 3-for-2 stock split paid to shareholders of record on
September 17, 1993.
++Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions. Total returns for periods of less than a full year are not
annualized.
</TABLE>

5
<PAGE>
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout each of the indicated periods)
(Class B Shares)

The following financial highlights with respect to the five-year period
ended September 30, 1994 have been audited by Price Waterhouse LLP,
independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the financial statements and
notes thereto, which appear in the Statement of Additional Information. The
following financial highlights contain selected data for a Class B share of
common stock outstanding, total return, ratios to average net assets and other
supplemental data for the periods indicated. The information is based on data
contained in the financial statements.
<TABLE>
<CAPTION>
Year ended September 30,
--------------------------------------------------------------------
1994** 1993**/+ 1992**/+ 1991+ 1990+ 1989*/+
-------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period............................ $ 12.74 $ 11.08 $ 10.11 $ 7.34 $ 9.11 $ 7.47
-------- -------- -------- -------- -------- --------
Income from investment operations
Net investment income (loss)....... (.09) (.06 ) (.07 ) (.02) .07 .06
Net realized and unrealized gain
(loss) on investment
transactions...................... .13 3.08 1.44 2.82 (1.75) 1.65
-------- -------- -------- -------- -------- --------
Total from investment operations... .04 3.02 1.37 2.80 (1.68) 1.71
-------- -------- -------- -------- -------- --------
Less distributions
Dividends from net investment
income............................ -- -- -- (.03) (.09) (.07)
Distributions from net realized
capital gains..................... (.79) (1.36 ) (.40 ) -- -- --
-------- -------- -------- -------- -------- --------
Total distributions................ (.79) (1.36 ) (.40 ) (.03) (.09) (.07)
-------- -------- -------- -------- -------- --------
Net asset value, end of period..... $ 11.99 $ 12.74 $ 11.08 $ 10.11 $ 7.34 $ 9.11
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
TOTAL RETURN ++:................... .42% 29.40 % 14.27 % 38.33% (18.63)% 23.20%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)...... $425,502 $376,068 $172,018 $118,660 $86,440 $160,995
Ratios to average net assets:
Expenses, including distribution
fees............................ 2.09% 1.97 % 2.13 % 2.30% 2.18% 1.79%
Expenses, excluding distribution
fees............................ 1.09% .97 % 1.13 % 1.30% 1.28% 1.17%
Net investment income (loss)..... (.76)% (.54 )% (.61 )% (.21)% .91% .74%
Portfolio turnover................. 82% 68 % 99 % 111% 79% 79%

1988+ 1987+ 1986+ 1985+
-------- -------- -------- --------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period............................ $ 9.58 $ 9.09 $ 8.30 $ 8.03
-------- -------- -------- --------
Income from investment operations
Net investment income (loss)....... .08+++ -- .02+++ .04
Net realized and unrealized gain
(loss) on investment
transactions...................... (1.34) 2.40 1.89 .37
-------- -------- -------- --------
Total from investment operations... (1.26) 2.40 1.91 .41
-------- -------- -------- --------
Less distributions
Dividends from net investment
income............................ (.03) -- (.02) (.06)
Distributions from net realized
capital gains..................... (.82) (1.91) (1.10) (.08)
-------- -------- -------- --------
Total distributions................ (.85) (1.91) (1.12) (.14)
-------- -------- -------- --------
Net asset value, end of period..... $ 7.47 $ 9.58 $ 9.09 $ 8.30
-------- -------- -------- --------
-------- -------- -------- --------
TOTAL RETURN ++:................... (10.72)% 31.61% 26.22% 5.14%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of year (000)...... $143,263 $186,655 $87,844 $58,449
Ratios to average net assets:
Expenses, including distribution
fees............................ 1.66%+++ 1.61% 1.40%+++ 1.32%
Expenses, excluding distribution
fees............................ 1.05%+++ 1.07% 1.16%+++ 1.32%
Net investment income (loss)..... 1.07%+++ .08% .18%+++ .40%
Portfolio turnover................. 76% 113% 139% 110%
<FN>

------------------
*On January 31, 1989, Prudential Mutual Fund Management, Inc. succeeded The
Prudential Insurance Company of America as investment adviser and since
then has acted as manager of the Fund. See "Manager" in the Statement of
Additional Information.
**Calculated based upon weighted average shares outstanding during the year.
+Restated to reflect 3-for-2 stock split paid to shareholders of record on
September 17, 1993.
++Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends and distributions.
+++Net of expense reimbursement.
</TABLE>

6
<PAGE>
FINANCIAL HIGHLIGHTS
(for a share outstanding throughout the indicated period)
(Class C Shares)

The following financial highlights have been audited by Price Waterhouse
LLP, independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the financial statements and
notes thereto, which appear in the Statement of Additional Information. The
following financial highlights contain selected data for a Class C share of
common stock outstanding, total return, ratios to average net assets and other
supplemental data for the period indicated. The information is based on data
contained in the financial statements.

<TABLE>
<CAPTION>
August 1,
1994* Through
September 30,
1994
--------------
<S> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period.............................. $11.61
------
Income from investment operations
Net investment income (loss)......... (.01)
Net realized and unrealized gain
(loss) on investment transactions... .39
------
Total from investment operations..... .38
------
Net asset value, end of period....... $11.99
------
------
TOTAL RETURN +:...................... 3.27%
RATIOS/SUPPLEMENTAL DATA++:
Net assets, end of year (000)........ $ 269
Ratios to average net assets:
Expenses, including distribution
fees.............................. 2.22%**
Expenses, excluding distribution
fees.............................. 1.22%**
Net investment income (loss)....... (.31)%**
Portfolio turnover................... 82%
<FN>

------------------
*Commencement of offering of Class C shares.
**Annualized.
+Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on the
last day of each period reported and includes reinvestment of dividends and
distributions.
++Since the Fund did not commence a public offering of Class C shares until
August 1, 1994, historical expenses and ratios of expenses to average net
assets of Class A or Class B shares are not necessarily indicative of
future expenses and related ratios of Class C shares.
</TABLE>

7
<PAGE>
HOW THE FUND INVESTS

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is capital growth. The Fund will attempt to
achieve this objective by investing principally in a carefully selected
portfolio of common stocks. Investment income is of incidental importance, and
the Fund may invest in securities which do not produce any income. However,
there may be periods when, in the judgment of the Fund's investment adviser,
market or general economic conditions justify a temporary defensive position.
There can be no assurance that such objective will be achieved. See "Investment
Objective and Policies" in the Statement of Additional Information.

The Fund's investment objective is a fundamental policy and, therefore, may
not be changed without the approval of the holders of a majority of the Fund's
outstanding voting securities as defined in the Investment Company Act of 1940,
as amended (the Investment Company Act). Fund policies that are not fundamental
may be modified by the Board of Directors.

The stocks which the Fund's investment adviser generally expects to select
for the Fund's portfolio are those which, in the investment adviser's judgment,
have prospects of a high return on equity, increasing earnings, increasing
dividends (or an expectation of dividends) and price-earnings ratios that are
not excessive. These criteria are not rigid, and other stocks may be included in
the Fund's portfolio if they are expected to help the Fund attain its objective.
These criteria can be changed by the Fund's Board of Directors.

The Fund may also invest in preferred stocks and bonds, which have either
attached warrants or a conversion privilege into common stocks, and in warrants.
In addition, the Fund may purchase put options on stocks that the Fund holds as
protection against a significant price decline, may purchase and sell stock
index options and futures to hedge overall market risk and the investment of
cash flows and write listed put and listed covered call options. See "Hedging
and Return Enhancement Strategies" below. The Fund may also invest up to 15% of
its total assets in foreign securities, which may involve additional risks. Such
investment risks include future adverse political and economic developments,
possible seizure or nationalization of the company in whose securities the Fund
has invested and possible establishment of exchange controls or other laws that
might adversely affect the repatriation of assets or the payment of dividends.
In addition, a portfolio of foreign securities may be adversely affected by
fluctuations in the relative rates of exchange between the currencies of
different nations and by exchange control regulations. See "Other Investments
and Policies -- Foreign Investments" below.

In seeking to achieve its investment objective, the Fund has generally
invested in common stocks with smaller market capitalizations than those of the
stocks included in the Dow Jones Industrial Average or the largest stocks
included in the Standard & Poor's 500 Composite Stock Index. As a result, the
Fund's portfolio has generally been made up of common stocks issued by smaller,
less well known companies (with market capitalizations typically less than $1
billion or a corresponding market capitalization in foreign markets) selected by
the investment adviser on the basis of fundamental investment analysis. The Fund
may, however, invest in the securities of any issuer without regard to its size
or the market capitalization of its common stock. Companies in which the Fund is
likely to invest may have limited product lines, markets or financial resources
and may lack management depth. The securities of these companies may have
limited marketability and may be subject to more abrupt or erratic market
movements than securities of larger, more established companies or the market
averages in general.

8
<PAGE>
The Fund may also invest without limit in high quality money market
instruments (a) when conditions dictate a temporary defensive strategy, (b)
until the proceeds from the sale of the Fund's shares have been invested or (c)
during temporary periods of portfolio restructuring. Such instruments may
include commercial paper of domestic corporations, certificates of deposit,
repurchase agreements, bankers' acceptances and other obligations of domestic
banks, and obligations issued or guaranteed by the U.S. Government, its
instrumentalities or its agencies.

HEDGING AND RETURN ENHANCEMENT STRATEGIES

The Fund may also engage in various portfolio strategies, including
derivatives, to reduce certain risks of its investments and to attempt to
enhance return, but not for speculation. These strategies include the purchase
and sale of put and call options, and the purchase and sale of stock index
futures and combinations thereof. The Manager will use such techniques as market
conditions warrant. The Fund's ability to use these strategies may be limited by
market conditions, regulatory limits and tax considerations and there can be no
assurance that any of these strategies will succeed. See "Investment Objective
and Policies" in the Statement of Additional Information. New financial products
and risk management techniques continue to be developed and the Fund may use
these new investments and techniques to the extent consistent with its
investment objective and policies. In contrast to many investment companies
which invest in securities of foreign issuers, the Fund is not permitted to
enter into futures or options contracts involving foreign currencies. As a
result, there may be occasions when the investment adviser may wish, but will be
unable, to hedge the Fund's currency exposure to foreign investments.

Options Transactions

The Fund may purchase and write (I.E., sell) put and call options on equity
securities that are traded on national securities exchanges or stock indices
that are traded on national securities exchanges or listed on NASDAQ.

A call option on equity securities gives the purchaser, in exchange for a
premium paid, the right for a specified period of time to purchase the
securities subject to the option at a specified price (the "exercise price" or
"strike price"). The writer of a call option, in return for the premium, has the
obligation, upon exercise of the option, to deliver, depending upon the terms of
the option contract, the underlying securities to the purchaser upon receipt of
the exercise price. When the Fund writes a call option, the Fund gives up the
potential for gain on the underlying securities in excess of the exercise price
of the option during the period that the option is open.

A put option on equity securities gives the purchaser, in return for a
premium, the right, for a specified period of time, to sell the securities
subject to the option to the writer of the put at the specified exercise price.
The writer of the put option, in return for the premium, has the obligation,
upon exercise of the option, to acquire the securities underlying the option at
the exercise price. The Fund as the writer of a put option might, therefore, be
obligated to purchase underlying securities for more than their current market
price.

Options on stock indices are similar to options on equity securities except
that, rather than the right to take or make delivery of stock at a specified
price, an option on a stock index gives the holder the right, in return for a
premium paid, to receive, upon exercise of the option, an amount of cash if the
closing level of the stock index upon which the option is based is greater than,
in the case of a call, or less than, in the case of a put, the exercise price of
the option. The writer of an index option, in return for a premium, is obligated
to pay the amount of cash due upon exercise of the option.

The Fund will write only "covered" options. An option is covered if, so long
as the Fund is obligated under the option, it owns an offsetting position in the
underlying securities or maintains cash, U.S. Government securities or other
liquid high-grade debt obligations with a value sufficient at all times to cover
its obligations in a segregated account. See "Investment Objective and
Policies--Limitation on Purchase and Sale of Stock Options, Options on Stock
Indices and Stock Index Futures" in the Statement of Additional Information.

9
<PAGE>
There is no limitation on the amount of call options the Fund may write. The
Fund may only write covered put options to the extent that cover for such
options does not exceed 25% of the Fund's net assets. The Fund will not purchase
an option if, as a result of such purchase, more than 20% of its total assets
would be invested in premiums for such options.

Stock Index Futures

The Fund may purchase and sell stock index futures which are traded on a
commodities exchange or board of trade for certain hedging and risk management
purposes in accordance with regulations of the Commodity Futures Trading
Commission.

A stock index futures contract is an agreement in which one party agrees to
deliver to another an amount of cash equal to a specific dollar amount times the
difference between a specific stock index at the close of the last trading day
of the contract and the price at which the agreement is made. No physical
delivery of the underlying stocks in the index is made.

The Fund may not purchase or sell stock index futures if, immediately
thereafter, more than one-third of its net assets would be hedged. In addition,
except in the case of a call written and held on the same index, the Fund will
write call options on indices or sell stock index futures only if the amount
resulting from the multiplication of the then current level of the index (or
indices) upon which the options or futures contract(s) is based, the applicable
multiplier(s), and the number of futures or options contracts which would be
outstanding would not exceed one-third of the value of the Fund's net assets.

The Fund's successful use of stock index futures contracts and options on
indices depends upon its ability to predict the direction of the market and is
subject to various additional risks. The correlation between movements in the
price of the stock index future and the price of the securities being hedged is
imperfect and there is a risk that the value of the securities being hedged may
increase or decrease at a greater rate than the related futures contract,
resulting in losses to the Fund. Certain futures exchanges or boards of trade
have established daily limits on the amount that the price of a futures contract
or related options may vary, either up or down, from the previous day's
settlement price. These daily limits may restrict the Fund's ability to purchase
or sell certain futures contracts or related options on any particular day. In
addition, if the Fund purchases futures to hedge against market advances before
it can invest in common stock in an advantageous manner and the market declines,
the Fund might create a loss on the futures contract. In addition, the ability
of the Fund to close out a futures position or an option depends on a liquid
secondary market. There is no assurance that liquid secondary markets will exist
for any particular futures contract or option at any particular time. See
"Investment Objective and Policies" in the Statement of Additional Information.

The Fund's ability to enter into stock index futures and listed options is
limited by the requirements of the Internal Revenue Code of 1986, as amended
(the Internal Revenue Code), for qualification as a regulated investment
company. See "Taxes" in the Statement of Additional Information.

Risks of Hedging and Return Enhancement Strategies

Participation in the options or futures markets involves investment risks and
transaction costs to which the Fund would not be subject absent the use of these
strategies. If the investment adviser's prediction of movements in the direction
of the securities markets is inaccurate, the adverse consequences to the Fund
may leave the Fund in a worse position than if such strategies were not used.
Risks inherent in the use of options and stock index futures include (1)
dependence on the investment adviser's ability to predict correctly movements in
the direction of specific securities being hedged or the movement in stock
indices; (2) imperfect correlation between the price of options and stock index
futures and options thereon and movements in the prices of the securities being
hedged; (3) the fact that skills needed to use these strategies are different
from those needed to

10
<PAGE>
select portfolio securities; (4) the possible absence of a liquid secondary
market for any particular instrument at any time; and (5) the possible need to
defer closing out certain hedged positions to avoid adverse tax consequences.
See "Investment Objective and Policies" and "Taxes" in the Statement of
Additional Information.

OTHER INVESTMENTS AND POLICIES

Foreign Investments

The Fund may invest up to 15% of its total assets in securities of foreign
issuers (including securities of issuers domiciled outside of the U.S. which
trade on a national securities exchange, obligations of foreign branches of
domestic banks and American Depositary Receipts).

Investing in securities of foreign companies and countries involves certain
considerations and risks which are not typically associated with investing in
securities of domestic companies. Foreign companies are not generally subject to
uniform accounting, auditing and financial standards and requirements comparable
to those applicable to U.S. companies. There may also be less government
supervision and regulation of foreign securities exchanges, brokers and public
companies than exists in the United States. Dividends and interest paid by
foreign issuers may be subject to withholding and other foreign taxes which may
decrease the net return on such investments as compared to dividends and
interest paid to the Fund by domestic companies. There may be the possibility of
expropriations, confiscatory taxation, political, economic or social instability
or diplomatic developments which could affect assets of the Fund held in foreign
countries. There may be less publicly available information about foreign
companies and governments compared to reports and ratings published about U.S.
companies. Foreign securities markets have substantially less volume than, for
example, the New York Stock Exchange and securities of some foreign companies
are less liquid and more volatile than securities of comparable U.S. companies.
Brokerage commissions and other transaction costs of foreign securities
exchanges are generally higher than in the United States. In addition, a
portfolio of foreign securities may be adversely affected by fluctuations in the
relative rates of exchange between the currencies of different nations and by
exchange control regulations.

The financial condition and results of operations of many domestic issuers
in which the Fund is permitted to invest may be affected by some of the
foregoing factors to the extent that their sales are made and/or their
operations are conducted outside the U.S.

Repurchase Agreements

The Fund may on occasion enter into repurchase agreements whereby the seller
of a security agrees to repurchase that security from the Fund at a mutually
agreed-upon time and price. The period of maturity is usually quite short,
possibly overnight or a few days, although it may extend over a number of
months. The resale price is in excess of the purchase price, reflecting an
agreed-upon rate of return effective for the period of time the Fund's money is
invested in the security. The Fund's repurchase agreements will at all times be
fully collateralized in an amount at least equal to the purchase price,
including accrued interest earned on the underlying securities. The instruments
held as collateral are valued daily, and if the value of instruments declines,
the Fund will require additional collateral. If the seller defaults and the
value of the collateral securing the repurchase agreement declines, the Fund may
incur a loss. The Fund participates in a joint repurchase account with other
investment companies managed by Prudential Mutual Fund Management, Inc. pursuant
to an order of the Securities and Exchange Commission (SEC).

When-Issued and Delayed Delivery Securities

The Fund may purchase or sell securities on a when-issued or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by the Fund with payment and delivery taking place as much as
a month or more in the future in order to secure what is considered to be an
advantageous price and yield to the Fund at the time of entering into the
transaction. The Fund's Custodian will maintain, in a segregated account of the
Fund, cash, U.S. Government securities or other liquid high-grade debt
obligations having a value equal to or greater than the Fund's purchase
commitments; the Custodian

11
<PAGE>
will likewise segregate securities sold on a delayed delivery basis. The
securities so purchased are subject to market fluctuation and no interest
accrues to the purchaser during the period between purchase and settlement. At
the time of delivery of the securities the value may be more or less than the
purchase price and an increase in the percentage of the Fund's assets committed
to the purchase of securities on a when-issued or delayed delivery basis may
increase the volatility of the Fund's net asset value.

Borrowing

The Fund may borrow an amount equal to no more than 20% of the value of its
total assets (calculated when the loan is made) from banks for temporary,
emergency or extraordinary purposes or for the clearance of transactions. The
Fund may pledge up to 20% of its total assets to secure these borrowings.
However, the Fund will not purchase portfolio securities when borrowings exceed
5% of the value of the Fund's total assets.

Short Sales Against-the-Box

The Fund may make short sales of securities or maintain a short position,
provided that at all times when a short position is open the Fund owns an equal
amount of such securities or securities convertible into or exchangeable,
without payment of any further consideration, for an equal amount of the
securities of the same issuer as the securities sold short (a short sale
against-the-box), and that not more than 25% of the Fund's net assets
(determined at the time of the short sale) may be subject to such sales. Short
sales will be made primarily to defer realization of gain or loss for federal
tax purposes. The Fund does not intend to have more than 5% of its net assets
(determined at the time of the short sale) subject to short sales
against-the-box during the coming year.

Illiquid Securities

The Fund may invest up to 10% of its net assets in illiquid securities,
including repurchase agreements which have a maturity of longer than seven days,
securities with legal or contractual restrictions on resale (restricted
securities) and securities that are not readily marketable. Restricted
securities eligible for resale pursuant to Rule 144A under the Securities Act of
1933, as amended (the Securities Act) and privately placed commercial paper,
that have a readily available market are not considered illiquid for purposes of
this limitation. The investment adviser will monitor the liquidity of such
restricted securities under the supervision of the Board of Directors.
Repurchase agreements subject to demand are deemed to have a maturity equal to
the applicable notice period.

INVESTMENT RESTRICTIONS

The Fund is subject to certain investment restrictions which, like its
investment objective, constitute fundamental policies. Fundamental policies
cannot be changed without the approval of the holders of a majority of the
Fund's outstanding voting securities, as defined in the Investment Company Act.
See "Investment Restrictions" in the Statement of Additional Information.

HOW THE FUND IS MANAGED

The Fund has a Board of Directors which, in addition to overseeing the actions
of the Fund's Manager, Subadviser and Distributor, as set forth below, decides
upon matters of general policy. The Fund's Manager conducts and supervises the
daily business operations of the Fund. The Fund's Subadviser furnishes daily
investment advisory services.

For the fiscal year ended September 30, 1994, the Fund's total expenses as a
percentage of average net assets for the Fund's Class A, Class B and Class C
shares were 1.33%, 2.09%, and 2.22% (annualized), respectively. See "Financial
Highlights."

12
<PAGE>
MANAGER

Prudential Mutual Fund Management, Inc. (PMF or the Manager), One Seaport
Plaza, New York, New York 10292, is the Manager of the Fund and is compensated
for its services at an annual rate of .70 of 1% of the Fund's average daily net
assets. It was incorporated in May 1987 under the laws of the State of Delaware.
For the fiscal year ended September 30, 1994, the Fund paid management fees to
PMF of .70% of the Fund's average net assets. See "Manager" in the Statement of
Additional Information.

As of December 31, 1994, PMF served as the manager to 39 open-end investment
companies, constituting all of the Prudential Mutual Funds, and as manager or
administrator to 30 closed-end investment companies with aggregate assets of
approximately $47 billion.

Under the Management Agreement with the Fund, PMF manages the investment
operations of the Fund and also administers the Fund's corporate affairs. See
"Manager" in the Statement of Additional Information.

Under a Subadvisory Agreement between PMF and The Prudential Investment
Corporation (PIC or the Subadvisor), PIC furnishes investment advisory services
in connection with the management of the Fund and is reimbursed by PMF for its
reasonable costs and expenses incurred in providing such services. Under the
Management Agreement, PMF continues to have responsibility for all investment
advisory services and supervises PIC's performance of such services.

The current portfolio manager of the Fund is Robert P. Fetch, a Managing
Director of Prudential Investment Advisors, a unit of PIC. Mr. Fetch has
responsibility for the day-to-day management of the Fund's portfolio. Mr. Fetch
has managed the Fund's portfolio since May 1984 and has been employed by PIC as
a portfolio manager since 1983.

PMF and PIC are wholly-owned subsidiaries of The Prudential Insurance
Company of America (Prudential), a major diversified insurance and financial
services company.

DISTRIBUTOR

Prudential Mutual Fund Distributors, Inc. (PMFD), One Seaport Plaza, New York,
New York 10292, is a corporation organized under the laws of the State of
Delaware and serves as the distributor of Class A shares of the Fund. It is a
wholly-owned subsidiary of PMF.

Prudential Securities Incorporated (Prudential Securities or PSI), One
Seaport Plaza, New York, New York 10292, is a corporation organized under the
laws of the State of Delaware and serves as the distributor of the Class B and
Class C shares of the Fund. It is an indirect, wholly-owned subsidiary of
Prudential.

Under separate Distribution and Service Plans (the Class A Plan, the Class B
Plan and the Class C Plan, collectively, the Plans) adopted by the Fund under
Rule 12b-1 under the Investment Company Act and separate distribution agreements
(the Distribution Agreements), PMFD and Prudential Securities (collectively, the
Distributor) incur the expenses of distributing the Fund's Class A, Class B and
Class C shares. These expenses include commissions and account servicing fees
paid to, or on account of, financial advisers of Prudential Securities and
representatives of Pruco Securities Corporation (Prusec), an affiliated
broker-dealer, commissions and account servicing fees paid to, or on account of,
other broker-dealers or financial institutions (other than national banks) which
have entered into agreements with the Distributor, advertising expenses, the
cost of printing and mailing prospectuses to potential investors and indirect
and overhead costs of Prudential Securities and Prusec associated with the sale
of Fund shares, including lease, utility, communications and sales promotion
expenses. The State of Texas requires that shares of the Fund may be sold in
that state only by dealers or other financial institutions which are registered
there as broker-dealers.

13
<PAGE>
Under the Plans, the Fund is obligated to pay distribution and/or service
fees to the Distributor as compensation for its distribution and service
activities, not as reimbursement for specific expenses incurred. If the
Distributor's expenses exceed its distribution and service fees, the Fund will
not be obligated to pay any additional expenses. If the Distributor's expenses
are less than such distribution and service fees, it will retain its full fees
and realize a profit.

Under the Class A Plan, the Fund may pay PMFD for its distribution-related
activities with respect to Class A shares at an annual rate of up to .30 of 1%
of the average daily net assets of the Class A shares. The Class A Plan provides
that (i) up to .25 of 1% of the average daily net assets of the Class A shares
may be used to pay for personal service and/ or the maintenance of shareholder
accounts (service fee) and (ii) total distribution fees (including the service
fee of .25 of 1%) may not exceed .30 of 1% of the average daily net assets of
the Class A shares. PMFD has agreed to limit its distribution-related fees
payable under the Class A Plan to .25 of 1% of the average daily net assets of
the Class A shares for the fiscal year ending September 30, 1995.

For the fiscal year ended September 30, 1994, PMFD received payments of
$229,425 under the Class A Plan. This amount was primarily expended for payment
of account servicing fees to financial advisers and other persons who sell Class
A shares. For the fiscal year ended September 30, 1994, PMFD also received
approximately $498,400 in initial sales charges.

Under the Class B and Class C Plans, the Fund pays Prudential Securities for
its distribution-related activities with respect to Class B and Class C shares
at an annual rate of 1% of the average daily net assets of each of the Class B
and Class C shares. The Class B and Class C Plans provide for the payment to
Prudential Securities of (i) an asset-based sales charge of .75 of 1% of the
average daily net assets of each of the Class B and Class C shares, and (ii) a
service fee of .25 of 1% of the average daily net assets of each of the Class B
and Class C shares. The service fee is used to pay for personal service and/or
the maintenance of shareholder accounts. Prudential Securities also receives
contingent deferred sales charges from certain redeeming shareholders. See
"Shareholder Guide--How to Sell Your Shares--Contingent Deferred Sales Charges."

For the fiscal year ended September 30, 1994, Prudential Securities incurred
distribution expenses of approximately $3,255,400 under the Class B Plan and
received $4,002,398 from the Fund under the Class B Plan. In addition,
Prudential Securities received approximately $796,400 in contingent deferred
sales charges from redemptions of Class B shares during this period. For the
period August 1 through September 30, 1994 Prudential Securities incurred
distribution expenses of approximately $2,800 under the Class C Plan and
received $292 from the Fund under the Class C Plan. Prudential Securities did
not receive any contingent deferred sales charges from redemptions of Class C
shares during this period.

For the fiscal year ended September 30, 1994, the Fund paid distribution
expenses of .24%, 1% and 1% of the average net assets of the Class A, Class B
and Class C shares, respectively. The Fund records all payments made under the
Plans as expenses in the calculation of net investment income. Prior to August
1, 1994, the Class A and Class B Plans operated as "reimbursement type" plans
and, in the case of Class B, provided for the reimbursement of distribution
expenses incurred in current and prior years. See "Distributor" in the Statement
of Additional Information.

Distribution expenses attributable to the sale of shares of the Fund will be
allocated to each class based upon the ratio of sales of each class to the sales
of all shares of the Fund other than expenses allocable to a particular class.
The distribution fee and sales charge of one class will not be used to subsidize
the sale of another class.

Each Plan provides that it shall continue in effect from year to year
provided that a majority of the Board of Directors of the Fund, including a
majority of the Directors who are not "interested persons" of the Fund (as
defined in the Investment Company Act) and who have no direct or indirect
financial interest in the operation of the Plan or any agreement related to the
Plan (the Rule 12b-1 Directors), vote annually to continue the Plan. Each Plan
may be terminated at any time by vote of a majority of the Rule 12b-1 Directors
or of a majority of the outstanding shares of the applicable class of the Fund.
The Fund will not be obligated to pay expenses incurred under any plan if it is
terminated or not continued.

14
<PAGE>
In addition to distribution and service fees paid by the Fund under the
Class A, Class B and Class C Plans, the Manager (or one of its affiliates) may
make payments out of its own resources to dealers and other persons who
distribute shares of the Fund. Such payments may be calculated by reference to
the net asset value of shares sold by such persons or otherwise.

The Distributor is subject to the rules of the National Association of
Securities Dealers, Inc. governing maximum sales charges. See "Distributor" in
the Statement of Additional Information.

On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators (with the exception of the Texas Securities
Commissioner who joined the settlement on January 18, 1994) and the NASD to
resolve allegations that from 1980 through 1990 PSI sold certain limited
partnership interests in violation of securities laws to persons for whom such
securities were not suitable and misrepresented the safety, potential returns
and liquidity of these investments. Without admitting or denying the allegations
asserted against it, PSI consented to the entry of an SEC Administrative Order
which stated that PSI's conduct violated the federal securities laws, directed
PSI to cease and desist from violating the federal securities laws, pay civil
penalties, and adopt certain remedial measures to address the violations.

Pursuant to the terms of the SEC settlement, PSI agreed to the imposition of
a $10,000,000 civil penalty, established a settlement fund in the amount of
$330,000,000 and procedures to resolve legitimate claims for compensatory
damages by purchasers of the partnership interests. PSI has agreed to provide
additional funds, if necessary, for the purpose of the settlement fund. PSI's
settlement with the state securities regulators included an agreement to pay a
penalty of $500,000 per jurisdiction. PSI consented to a censure and to the
payment of a $5,000,000 fine in settling the NASD action.

In October 1994, a criminal complaint was filed with the United States
Magistrate for the Southern District of New York alleging that PSI committed
fraud in connection with the sale of certain limited partnership interests in
violation of federal securities laws. An agreement was simultaneously filed to
defer prosecution of these charges for a period of three years from the signing
of the agreement, provided that PSI complies with the terms of the agreement.
If, upon completion of the three year period, PSI has complied with the terms of
the agreement, no prosecution will be instituted by the United States for the
offenses charged in the complaint. If on the other hand, during the course of
the three year period, PSI violates the terms of the agreement, the U.S.
Attorney can then elect to pursue these changes. Under the terms of the
agreement, PSI agreed, among other things, to pay an additional $330,000,000
into the fund established by the SEC to pay restitution to investors who
purchased certain PSI limited partnership interests.

For more detailed information concerning the foregoing matters, see
"Distributor" in the Statement of Additional Information, a copy of which may be
obtained at no cost by calling 1-800-225-1852.

The Fund is not affected by PSI's financial condition and is an entirely
separate legal entity from PSI, which has no beneficial ownership therein and
the Fund's assets which are held by State Street Bank & Trust Company, an
independent custodian, are separate and distinct from PSI.

PORTFOLIO TRANSACTIONS

Prudential Securities may act as a broker or futures commission merchant for
the Fund, provided that the commissions, fees or other remuneration it receives
are fair and reasonable. See "Portfolio Transactions and Brokerage" in the
Statement of Additional Information.

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities and
cash and, in that capacity, maintains certain financial and accounting books and
records pursuant to an agreement with the Fund. Its mailing address is P. O. Box
1713, Boston, Massachusetts 02105.

Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as Transfer Agent and Dividend Disbursing Agent and, in
those capacities, maintains certain books and records for the Fund. PMFS is a
wholly-owned subsidiary of PMF. Its mailing address is P. O. Box 15005, New
Brunswick, New Jersey 08906-5005.

15
<PAGE>
HOW THE FUND VALUES ITS SHARES

The Fund's net asset value per share or NAV is determined by subtracting its
liabilities from the value of its assets and dividing the remainder by the
number of outstanding shares. NAV is calculated separately for each class. The
Board of Directors has fixed the specific time of day for the computation of the
Fund's NAV to be as of 4:15 P.M., New York time.

Portfolio securities are valued based on market quotations or, if not
readily available, at fair value as determined in good faith under procedures
established by the Fund's Board of Directors. See "Net Asset Value" in the
Statement of Additional Information.

The Fund will compute its NAV once daily on days that the New York Stock
Exchange is open for trading except on days on which no orders to purchase, sell
or redeem shares have been received by the Fund or days on which changes in the
value of the Fund's portfolio securities do not materially affect the NAV. The
New York Stock Exchange is closed on the following holidays: New Year's Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

Although the legal rights of each class of shares are substantially
identical, the different expenses borne by each class will result in different
NAVs and dividends. The NAV of Class B and Class C shares will generally be
lower than the NAV of Class A shares as a result of the larger
distribution-related fee to which Class B and Class C shares are subject. It is
expected, however, that the NAV of the three classes will tend to converge
immediately after the recording of dividends, which will differ by approximately
the amount of the distribution-related expense accrual differential among the
classes.

HOW THE FUND CALCULATES PERFORMANCE

From time to time the Fund may advertise its total return (including "average
annual" total return and "aggregate" total return) and yield in advertisements
or sales literature. Total return and yield are calculated separately for Class
A, Class B and Class C shares. THESE FIGURES ARE BASED ON HISTORICAL EARNINGS
AND ARE NOT INTENDED TO INDICATE FUTURE PERFORMANCE. The "total return" shows
how much an investment in the Fund would have increased (decreased) over a
specified period of time (I.E., one, five or ten years or since inception of the
Fund) assuming that all distributions and dividends by the Fund were reinvested
on the reinvestment dates during the period and less all recurring fees. The
"aggregate" total return reflects actual performance over a stated period of
time. "Average annual" total return is a hypothetical rate of return that, if
achieved annually, would have produced the same aggregate total return if
performance had been constant over the entire period. "Average annual" total
return smooths out variations in performance and takes into account any
applicable initial or contingent deferred sales charges. Neither "average
annual" total return nor "aggregate" total return takes into account any federal
or state income taxes which may be payable upon redemption. The "yield" refers
to the income generated by an investment in the Fund over a one-month or 30-day
period. This income is then "annualized;" that is, the amount of income
generated by the investment during that 30-day period is assumed to be generated
each 30-day period for twelve periods and is shown as a percentage of the
investment. The income earned on the investment is also assumed to be reinvested
at the end of the sixth 30-day period. The Fund also may include comparative
performance information in advertising or marketing the Fund's shares. Such
performance information may include data from Lipper Analytical Services, Inc.,
Morningstar Publications, Inc., other industry publications, business
periodicals and market indices. See "Performance Information" in the Statement
of Additional Information. The Fund will include performance data for each class
of shares of the Fund in any advertisement or information including performance
data of the Fund. Further performance information is contained in the Fund's
annual and semi-annual reports to shareholders, which may be obtained without
charge. See "Shareholder Guide--Shareholder Services--Reports to Shareholders."

16
<PAGE>
TAXES, DIVIDENDS AND DISTRIBUTIONS

Taxation of the Fund

The Fund has elected to qualify and intends to remain qualified as a regulated
investment company under the Internal Revenue Code. Accordingly, the Fund will
not be subject to federal income taxes on its net investment income and capital
gains, if any, that it distributes to its shareholders. See "Taxes" in the
Statement of Additional Information.

Taxation of Shareholders

Any dividends out of net investment income, together with distributions of net
short-term capital gains (I.E., the excess of net short-term capital gains over
net long-term capital losses), will be taxable as ordinary income to the
shareholder whether or not reinvested. Any net long-term capital gains (I.E.,
the excess of net long-term capital gains over net short-term capital losses)
distributed to shareholders will be taxable as such to the shareholders, whether
or not reinvested and regardless of the length of time a shareholder has owned
his or her shares. The maximum long-term capital gains rate for individuals is
28%. The maximum long-term capital gains rate for corporate shareholders is
currently the same as the maximum tax rate for ordinary income.

Dividends paid by the Fund will be eligible for the 70% dividends-received
deduction for corporate shareholders to the extent that the Fund's income is
derived from certain dividends received from domestic corporations. Capital
gains distributions are not eligible for the 70% dividends-received deduction.

Any gain or loss realized upon a sale or redemption of Fund shares by a
shareholder who is not a dealer in securities will generally be treated as a
long-term capital gain or loss if the shares have been held for more than one
year and otherwise as a short-term capital gain or loss. Any such loss, however,
on shares that are held for six months or less, will be treated as a long-term
capital loss to the extent of any capital gain distributions received by the
shareholder with respect to those shares.

The Fund has obtained opinions of counsel to the effect that neither (i) the
conversion of Class B shares into Class A shares nor (ii) the exchange of Class
B or Class C shares for Class A shares constitutes a taxable event for federal
income tax purposes. However, such opinions are not binding on the Internal
Revenue Service.

Shareholders are advised to consult their own tax advisers regarding
specific questions as to federal, state or local taxes.

Withholding Taxes

Under the Internal Revenue Code, the Fund is required to withhold and remit to
the U.S. Treasury 31% of dividends, capital gain distributions and redemption
proceeds payable to individuals and certain noncorporate shareholders who fail
to furnish correct tax identification numbers on IRS Form W-9 (or IRS Form W-8
in the case of certain foreign shareholders). Withholding at this rate is also
required from dividends and capital gains distributions (but not redemption
proceeds) payable to shareholders who are otherwise subject to backup
withholding. Dividends of net investment income and short-term capital gains to
a foreign shareholder will generally be subject to U.S. withholding tax at the
rate of 30% (or lower treaty rate).

Dividends and Distributions

The Fund expects to pay dividends of net investment income, if any,
semi-annually and make distributions at least annually of any net capital gains.
Dividends paid by the Fund with respect to each class of shares, to the extent
any dividends

17
<PAGE>
are paid, will be calculated in the same manner, at the same time, on the same
day and will be in the same amount except that each class will bear its own
distribution charges, generally resulting in lower dividends for Class B and
Class C shares. Distributions of net capital gains, if any, will be paid in the
same amount for each class of shares. See "How the Fund Values its Shares."

Dividends and distributions will be paid in additional Fund shares based on
the NAV of each class on the record date, or such other date as the Board of
Directors may determine, unless the shareholder elects in writing not less than
five business days prior to the record date to receive such dividends and
distributions in cash. Such election should be submitted to Prudential Mutual
Fund Services, Inc., Attention: Account Maintenance, P.O. Box 15015, New
Brunswick, New Jersey 08906-5015. The Fund will notify each shareholder after
the close of the Fund's taxable year of both the dollar amount and the taxable
status of that year's dividends and distributions on a per share basis. If you
hold shares through Prudential Securities, you should contact your financial
adviser to elect to receive dividends and distributions in cash.

When the Fund goes "ex-dividend," the NAV of each class is reduced by the
amount of the dividend or distribution allocable to each class. If you buy
shares just prior to the ex-dividend date (which generally occurs four business
days prior to the record date), the price you pay will include the dividend or
distribution and a portion of your investment will be returned to you as a
taxable dividend or distribution. You should, therefore, consider the timing of
dividends and distributions when making your purchases.

GENERAL INFORMATION

DESCRIPTION OF COMMON STOCK

The Fund was incorporated in Maryland on July 28, 1980. The Fund is authorized
to issue 750 million shares of common stock, $.01 par value per share, divided
into three classes, designated Class A, Class B and Class C common stock, each
of which consists of 250 million authorized shares. Each class of common stock
represents an interest in the same assets of the Fund and is identical in all
respects except that (i) each class bears different distribution expenses, (ii)
each class has exclusive voting rights with respect to its distribution and
service plan (except that the Fund has agreed with the SEC in connection with
the offering of a conversion feature on Class B shares to submit any amendment
of the Class A Plan to both Class A and Class B shareholders), (iii) each class
has a different exchange privilege and (iv) only Class B shares have a
conversion feature. See "How the Fund is Managed--Distributor." The Fund has
received an order from the SEC permitting the issuance and sale of multiple
classes of common stock. Currently, the Fund is offering three classes,
designated Class A, Class B and Class C shares. In accordance with the Fund's
Articles of Incorporation, the Board of Directors may authorize the creation of
additional series of common stock and classes within such series, with such
preferences, privileges, limitations and voting and dividend rights as the Board
may determine.

The Board of Directors may increase or decrease the number of authorized
shares without the approval of shareholders. Shares of the Fund, when issued,
are fully paid, nonassessable, fully transferable and redeemable at the option
of the holder. Shares are also redeemable at the option of the Fund under
certain circumstances as described under "Shareholder Guide--How to Sell Your
Shares." Each share of each class of common stock is equal as to earnings,
assets and voting privileges, except as noted above, and each class bears the
expenses related to the distribution of its shares. Except for the conversion
feature applicable to the Class B shares, there are no conversion, preemptive or
other subscription rights. In the event of liquidation, each share of common
stock of the Fund is entitled to its portion of all of the Fund's assets after
all debt and expenses of the Fund have been paid. Since Class B and Class C
shares generally bear higher distribution expenses than Class A shares, the
liquidation proceeds to shareholders of those classes are likely to be lower
than to Class A shareholders. The Fund's shares do not have cumulative voting
rights for the election of Directors.

18
<PAGE>
The Fund does not intend to hold annual meetings of shareholders unless
otherwise required by law. The Fund will not be required to hold meetings of
shareholders unless, for example, the election of Directors is required to be
acted on by shareholders under the Investment Company Act. Shareholders have
certain rights, including the right to call a meeting upon a vote of 10% of the
Fund's outstanding shares for the purpose of voting on the removal of one or
more Directors or to transact any other business.

ADDITIONAL INFORMATION

This Prospectus, including the Statement of Additional Information which has
been incorporated by reference herein, does not contain all the information set
forth in the Registration Statement filed by the Fund with the SEC under the
Securities Act of 1933. Copies of the Registration Statement may be obtained at
a reasonable charge from the SEC or may be examined, without charge, at the
office of the SEC in Washington, D.C.

SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND

You may purchase shares of the Fund through Prudential Securities, Prusec or
directly from the Fund, through its Transfer Agent, Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent), Attention: Investment Services,
P.O. Box 15020, New Brunswick, New Jersey 08906-5020. The minimum initial
investment for Class A and Class B shares is $1,000 per class and $5,000 for
Class C shares, except that the minimum initial investment for Class C shares
may be waived from time to time. The minimum subsequent investment is $100 for
all classes. All minimum investment requirements are waived for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. For purchases made through the Automatic Savings Accumulation Plan, the
minimum initial and subsequent investment is $50. The minimum initial investment
requirement is waived for purchases of Class A shares effected through an
exchange of Class B shares of The BlackRock Government Income Trust. See
"Shareholder Services" below.

The purchase price is the NAV next determined following receipt of an order
by the Transfer Agent or Prudential Securities plus a sales charge which, at
your option, may be imposed either (i) at the time of purchase (Class A shares)
or (ii) on a deferred basis (Class B or Class C shares). See "Alternative
Purchase Plan" below. See also "How the Fund Values its Shares."

Application forms can be obtained from PMFS, Prudential Securities or
Prusec. If a stock certificate is desired, it must be requested in writing for
each transaction. Certificates are issued only for full shares. Shareholders who
hold their shares through Prudential Securities will not receive stock
certificates.

The Fund reserves the right to reject any purchase order (including an
exchange into the Fund) or to suspend or modify the continuous offering of its
shares. See "How to Sell Your Shares" below.

Your dealer is responsible for forwarding payment promptly to the Fund. The
Distributor reserves the right to cancel any purchase order for which payment
has not been received by the fifth business day following the investment.

Transactions in Fund shares may be subject to postage and handling charges
imposed by your dealer.

Purchase by Wire. For an initial purchase of shares of the Fund by wire, you
must first telephone PMFS at (800) 225-1852 (toll-free) to receive an account
number. The following information will be requested: your name, address, tax
identification number, class election, dividend distribution election, amount
being wired, and wiring bank. Instructions should then be given by

19
<PAGE>
you to your bank to transfer funds by wire to State Street Bank and Trust
Company, Boston, Massachusetts, Custody and Shareholder Services Division,
Attention: Prudential Growth Opportunity Fund, Inc., specifying on the wire the
account number assigned by PMFS and your name and identifying the sales charge
alternative (Class A, Class B or Class C shares).

If you arrange for receipt by State Street of Federal Funds prior to 4:15
P.M., New York time, on a business day, you may purchase shares of the Fund as
of that day.

In making a subsequent purchase order by wire, you should wire State Street
directly and should be sure that the wire specifies Prudential Growth
Opportunity Fund, Inc., Class A, Class B or Class C shares and your name and
individual account number. It is not necessary to call PMFS to make subsequent
purchase orders utilizing Federal Funds. The minimum amount which may be
invested by wire is $1,000.

ALTERNATIVE PURCHASE PLAN

The Fund offers three classes of shares (Class A, Class B and Class C shares)
which allows you to choose the most beneficial sales charge structure for your
individual circumstances given the amount of the purchase, the length of time
you expect to hold the shares and other relevant circumstances (Alternative
Purchase Plan).

<TABLE>
<CAPTION>
Annual 12b-1 Fees
(as a % of average daily
Sales Charge net assets) Other information
------------------------------ ------------------------------ ------------------------------
<S> <C> <C> <C>
Class A Maximum initial sales charge .30 of 1% (Currently being Initial sales charge waived or
of 5% of the public offering charged at a rate of .25 of reduced for certain purchases
price 1%)

Class B Maximum contingent deferred 1% Shares convert to Class A
sales charge or CDSC of 5% of shares approximately seven
the lesser of the amount years after purchase
invested or the redemption
proceeds; declines to zero
after six years

Class C Maximum CDSC of 1% of the 1% Shares do not convert to
lesser of the amount invested another class
or the redemption proceeds on
redemptions made within one
year of purchase
</TABLE>

The three classes of shares represent an interest in the same portfolio of
investments of the Fund and have the same rights, except that (i) each class
bears the separate expenses of its Rule 12b-1 distribution and service plan,
(ii) each class has exclusive voting rights with respect to its plan (except as
noted under the heading "General Information--Description of Common Stock"), and
(iii) only Class B shares have a conversion feature. The three classes also have
separate exchange privileges. See "How to Exchange Your Shares" below. The
income attributable to each class and the dividends payable on the shares of
each class will be reduced by the amount of the distribution fee of each class.
Class B and Class C shares bear the expenses of a higher distribution fee which
will generally cause them to have higher expense ratios and to pay lower
dividends than the Class A shares.

Financial advisers and other sales agents who sell shares of the Fund will
receive different compensation for selling Class A, Class B and Class C shares
and will generally receive more compensation initially for selling Class A and
Class B shares than for selling Class C shares.

In selecting a purchase alternative, you should consider, among other
things, (1) the length of time you expect to hold your investment, (2) the
amount of any applicable sales charge (whether imposed at the time of purchase
or redemption) and distribution-related fees, as noted above, (3) whether you
qualify for any reduction or waiver of any applicable sales charge,

20
<PAGE>
(4) the various exchange privileges among the different classes of shares (see
"How to Exchange Your Shares" below) and (5) the fact that Class B shares
automatically convert to Class A shares approximately seven years after purchase
(see "Conversion Feature--Class B Shares" below).

The following is provided to assist you in determining which method of
purchase best suits your individual circumstances and is based on current fees
and expenses being charged to the Fund:

If you intend to hold your investment in the Fund for less than 7 years and
do not qualify for a reduced sales charge on Class A shares, since Class A
shares are subject to a maximum initial sales charge of 5% and Class B shares
are subject to a CDSC of 5% which declines to zero over a 6 year period, you
should consider purchasing Class C shares over either Class A or Class B shares.

If you intend to hold your investment for 7 years or more and do not qualify
for a reduced sales charge on Class A shares, since Class B shares convert to
Class A shares approximately 7 years after purchase and because all of your
money would be invested initially in the case of Class B shares, you should
consider purchasing Class B shares over either Class A or Class C shares.

If you qualify for a reduced sales charge on Class A shares, it may be more
advantageous for you to purchase Class A shares over either Class B or Class C
shares regardless of how long you intend to hold your investment. However,
unlike Class B and Class C shares, you would not have all of your money invested
initially because the sales charge on Class A shares is deducted at the time of
purchase.

If you do not qualify for a reduced sales charge on Class A shares and you
purchase Class B or Class C shares, you would have to hold your investment for
more than 6 years in the case of Class B shares and Class C shares for the
higher cumulative annual distribution-related fee on those shares to exceed the
initial sales charge plus cumulative annual distribution-related fees on Class A
shares. This does not take into account the time value of money, which further
reduces the impact of the higher Class B or Class C distribution-related fee on
the investment, fluctuations in net asset value, the effect of the return on the
investment over this period of time or redemptions during which the CDSC is
applicable.

All purchases of $1 million or more, either as part of a single investment
or under Rights of Accumulation or Letters of Intent, must be for Class a
shares. See "Reduction and Waiver of Initial Sales Charges" below.

Class A Shares

The offering price of Class A shares for investors choosing the initial sales
charge alternative is the next determined NAV plus a sales charge (expressed as
a percentage of the offering price and of the amount invested) as shown in the
following table:

<TABLE>
<CAPTION>
Sales Charge as Sales Charge as Dealer Concession
Percentage of Percentage of as Percentage of
Amount of Purchase Offering Price Amount Invested Offering Price
- ------------------------- ----------------- ----------------- -------------------
<S> <C> <C> <C>
Less than $25,000 5.00% 5.26% 4.75%
$25,000 to $49,999 4.50 4.71 4.25
$50,000 to $99,999 4.00 4.17 3.75
$100,000 to $249,999 3.25 3.36 3.00
$250,000 to $499,999 2.50 2.56 2.40
$500,000 to $999,999 2.00 2.04 1.90
$1,000,000 and above None None None
</TABLE>

Selling dealers may be deemed to be underwriters, as that term is defined in
the Securities Act.

Reduction and Waiver of Initial Sales Charges. Reduced sales charges are
available through Rights of Accumulation and Letters of Intent. Shares of the
Fund and shares of other Prudential Mutual Funds (excluding money market funds
other than those

21
<PAGE>
acquired pursuant to the exchange privilege) may be aggregated to determine the
applicable reduction. See "Purchase and Redemption of Fund Shares--Reduction and
Waiver of Initial Sales Charges--Class A Shares" in the Statement of Additional
Information.

BENEFIT PLANS. Class A shares may be purchased at NAV, without payment of
an initial sales charge, by pension, profit-sharing or other employee benefit
plans qualified under Section 401 of the Internal Revenue Code and deferred
compensation and annuity plans under Sections 457 and 403(b)(7) of the Internal
Revenue Code (Benefit Plans), provided that the plan has existing assets of at
least $1 million invested in shares of Prudential Mutual Funds (excluding money
market funds other than those acquired pursuant to the exchange privilege) or
1,000 eligible employees or participants. In the case of Benefit Plans whose
accounts are held directly with the Transfer Agent or Prudential Securities and
for which the Transfer Agent or Prudential Securities does individual account
record keeping (Direct Account Benefit Plans) and Benefit Plans sponsored by PSI
or its subsidiaries (PSI or Subsidiary Prototype Benefit Plans), Class A shares
may be purchased at NAV by participants who are repaying loans made from such
plans to the participant.

PRUDENTIAL VISTA PROGRAM. Class A shares are offered at net asset value to
certain qualified employee retirement benefit plans under section 401 of the
Internal Revenue Code of 1986, as amended, for which Prudential Defined
Contribution Services serves as the recordkeeper provided that such plan is also
participating in the Prudential Vista Program (PruVista Plan), and provided
further that (i) for existing plans, the plan has existing assets of at least $1
million and at least 100 eligible employees or participants, and (ii) for new
plans, the plan has at least 500 eligible employees or participants. The term
"existing assets" for this purpose includes transferable cash and GICs
(guaranteed investment contracts) maturing within 4 years.

SPECIAL RULES APPLICABLE TO RETIREMENT PLANS. After a Benefit Plan or the
PruVista Plan qualifies to purchase Class A shares at NAV, all subsequent
purchases will be made at NAV.

OTHER WAIVERS. In addition, Class A shares may be purchased at NAV, through
Prudential Securities or the Transfer Agent, by the following persons: (a)
Directors and officers of the Fund and other Prudential Mutual Funds, (b)
employees of Prudential Securities and PMF and their subsidiaries and members of
the families of such persons who maintain an "employee related" account at
Prudential Securities or the Transfer Agent, (c) employees and special agents of
Prudential and its subsidiaries and all persons who have retired directly from
active service with Prudential or one of its subsidiaries, (d) registered
representatives and employees of dealers who have entered into a selected dealer
agreement with Prudential Securities provided that purchases at NAV are
permitted by such person's employer and (e) investors who have a business
relationship with a financial adviser who joined Prudential Securities from
another investment firm, provided that (i) the purchase is made within 90 days
of the commencement of the financial adviser's employment at Prudential
Securities, (ii) the purchase is made with proceeds of a redemption of shares of
any open-end, non-money market fund sponsored by the financial adviser's
previous employer (other than a fund which imposes a distribution or service fee
of .25 of 1% or less) and (iii) the financial adviser served as the client's
broker on the previous purchases.

You must notify the Fund's Transfer Agent either directly or through
Prudential Securities or Prusec that you are entitled to the reduction or waiver
of the sales charge. The reduction or waiver will be granted subject to
confirmation of your entitlement. No initial sales charges are imposed upon
Class A shares acquired upon the reinvestment of dividends and distributions.
See "Purchase and Redemption of Fund Shares--Reduction and Waiver of Initial
Sales Charges--Class A Shares" in the Statement of Additional Information.

Class B and Class C Shares

The offering price of Class B and Class C shares for investors choosing one of
the deferred sales charge alternatives is the NAV next determined following
receipt of an order by the Transfer Agent or Prudential Securities. Although
there is no sales charge imposed at the time of purchase, redemptions of Class B
and Class C shares may be subject to a CDSC. See "How to Sell Your
Shares--Contingent Deferred Sales Charges."

22
<PAGE>
HOW TO SELL YOUR SHARES

You can redeem your shares at any time for cash at the NAV next determined
after the redemption request is received in proper form by the Transfer Agent or
Prudential Securities. See "How the Fund Values its Shares." In certain cases,
however, redemption proceeds will be reduced by the amount of any applicable
contingent deferred sales charge, as described below. See "Contingent Deferred
Sales Charges" below.

If you hold shares of the Fund through Prudential Securities, you must
redeem your shares by contacting your Prudential Securities financial adviser.
If you hold shares in non-certificate form, a written request for redemption
signed by you exactly as the account is registered is required. If you hold
certificates, the certificates, signed in the name(s) shown on the face of the
certificates, must be received by the Transfer Agent in order for the redemption
request to be processed. If redemption is requested by a corporation,
partnership, trust or fiduciary, written evidence of authority acceptable to the
Transfer Agent must be submitted before such request will be accepted. All
correspondence and documents concerning redemptions should be sent to the Fund
in care of its Transfer Agent, Prudential Mutual Fund Services, Inc., Attention:
Redemption Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010.

If the proceeds of the redemption (a) exceed $50,000, (b) are to be paid to
a person other than the record owner, (c) are to be sent to an address other
than the address on the Transfer Agent's records, or (d) are to be paid to a
corporation, partnership, trust or fiduciary, the signature(s) on the redemption
request and on the certificates, if any, or stock power, must be guaranteed by
an "eligible guarantor institution." An "eligible guarantor institution"
includes any bank, broker, dealer or credit union. The Transfer Agent reserves
the right to request additional information from and make reasonable inquiries
of, any eligible guarantor institution. For clients of Prusec, a signature
guarantee may be obtained from the agency or office manager of most Prudential
Insurance and Financial Services or Preferred Services offices.

Payment for shares presented for redemption will be made by check within
seven days after receipt by the Transfer Agent of the certificate and/or written
request, except as indicated below. If you hold shares through Prudential
Securities, payment for shares presented for redemption will be credited to your
Prudential Securities account, unless you indicate otherwise. Such payment may
be postponed or the right of redemption suspended at times (a) when the New York
Stock Exchange is closed for other than customary weekends and holidays, (b)
when trading on such Exchange is restricted, (c) when an emergency exists as a
result of which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (d) during any other period when the SEC, by
order, so permits; provided that applicable rules and regulations of the SEC
shall govern as to whether the conditions prescribed in (b), (c) or (d) exist.

Payment for redemption of recently purchased shares will be delayed until
the Fund or its Transfer Agent has been advised that the purchase check has been
honored, up to 10 calendar days from the time of receipt of the purchase check
by the Transfer Agent. Such delay may be avoided by purchasing shares by wire or
by certified or official bank check.

Redemption in Kind. If the Board of Directors determines that it would be
detrimental to the best interests of the remaining shareholders of the Fund to
make payment wholly or partly in cash, the Fund may pay the redemption price in
whole or in part by a distribution in kind of securities from the investment
portfolio of the Fund, in lieu of cash, in conformity with applicable rules of
the SEC. Securities will be readily marketable and will be valued in the same
manner as in a regular redemption. See "How the Fund Values its Shares." If your
shares are redeemed in kind, you would incur transaction costs in converting the
assets into cash. The Fund, however, has elected to be governed by Rule 18f-1
under the Investment Company Act, under which the Fund is obligated to redeem
shares solely in cash up to the lesser of $250,000 or 1% of the net asset value
of the Fund during any 90-day period for any one shareholder.

Involuntary Redemption. In order to reduce expenses of the Fund, the Board of
Directors may redeem all of the shares of any shareholder, other than a
shareholder which is an IRA or other tax-deferred retirement plan, whose account
has a net asset

23
<PAGE>
value of less than $500 due to a redemption. The Fund will give such
shareholders 60 days' prior written notice in which to purchase sufficient
additional shares to avoid such redemption. No contingent deferred sales charge
will be imposed on any involuntary redemption.

90-day Repurchase Privilege. If you redeem your shares and have not previously
exercised the repurchase privilege, you may reinvest any portion or all of the
proceeds of such redemption in shares of the Fund at the NAV next determined
after the order is received, which must be within 90 days after the date of the
redemption. No sales charge will apply to such repurchases. You will receive PRO
RATA credit for any contingent deferred sales charge paid in connection with the
redemption of Class B or Class C shares. You must notify the Fund's Transfer
Agent, either directly or through Prudential Securities or Prusec, at the time
the repurchase privilege is exercised that you are entitled to credit for the
contingent deferred sales charge previously paid. Exercise of the repurchase
privilege will generally not affect federal income tax treatment of any gain
realized upon redemption. If the redemption resulted in a loss, some or all of
the loss, depending on the amount reinvested, will generally not be allowed for
federal income tax purposes.

Contingent Deferred Sales Charges

Redemptions of Class B shares will be subject to a contingent deferred sales
charge or CDSC declining from 5% to zero over a six-year period. Class C shares
redeemed within one year of purchase will be subject to a 1% CDSC. The CDSC will
be deducted from the redemption proceeds and reduce the amount paid to you. The
CDSC will be imposed on any redemption by you which reduces the current value of
your Class B or Class C shares to an amount which is lower than the amount of
all payments by you for shares during the preceding six years, in the case of
Class B shares, and one year, in the case of Class C shares. A CDSC will be
applied on the lesser of the original purchase price or the current value of the
shares being redeemed. Increases in the value of your shares or shares acquired
through reinvestment of dividends or distributions are not subject to a CDSC.
The amount of any contingent deferred sales charge will be paid to and retained
by the Distributor. See "How the Fund is Managed--Distributor" and "Waiver of
the Contingent Deferred Sales Charges--Class B Shares" below.

The amount of the CDSC, if any, will vary depending on the number of years
from the time of payment for the purchase of shares until the time of redemption
of such shares. Solely for purposes of determining the number of years from the
time of any payment for the purchase of shares, all payments during a month will
be aggregated and deemed to have been made on the last day of the month. The
CDSC will be calculated from the first day of the month after the initial
purchase, excluding the time shares were held in a money market fund. See "How
to Exchange Your Shares."

The following table sets forth the rates of the CDSC applicable to
redemptions of Class B shares:

<TABLE>
<CAPTION>
Contingent Deferred
Sales
Charge as a Percentage
of the Dollars
Year Since Purchase Invested or
Payment Made Redemption Proceeds
- ---------------------------------------------------------------------- ----------------------
<S> <C>
First................................................................. 5.0%
Second................................................................ 4.0%
Third................................................................. 3.0%
Fourth................................................................ 2.0%
Fifth................................................................. 1.0%
Sixth................................................................. 1.0%
Seventh............................................................... None
</TABLE>

In determining whether a CDSC is applicable to a redemption, the calculation
will be made in a manner that results in the lowest possible rate. It will be
assumed that the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and distributions; then of
amounts representing the increase in net asset value above the total amount of
payments for the purchase of Fund shares made during the preceding six years
(five years for Class B shares purchased prior to

24
<PAGE>
January 22, 1990); then of amounts representing the cost of shares held beyond
the applicable CDSC period; then of amounts representing the cost of shares
acquired prior to July 1, 1985; and finally, of amounts representing the cost of
shares held for the longest period of time within the applicable CDSC period.

For example, assume you purchased 100 Class B shares at $10 per share for a
cost of $1,000. Subsequently, you acquired 5 additional Class B shares through
dividend reinvestment. During the second year after the purchase you decided to
redeem $500 of your investment. Assuming at the time of the redemption the net
asset value had appreciated to $12 per share, the value of your Class B shares
would be $1,260 (105 shares at $12 per share). The CDSC would not be applied to
the value of the reinvested dividend shares and the amount which represents
appreciation ($260). Therefore, $240 of the $500 redemption proceeds ($500 minus
$260) would be charged at a rate of 4% (the applicable rate in the second year
after purchase) for a total CDSC of $9.60.

For federal income tax purposes, the amount of the CDSC will reduce the gain
or increase the loss, as the case may be, on the amount recognized on the
redemption of shares.

Waiver of the Contingent Deferred Sales Charges--Class B Shares. The CDSC will
be waived in the case of a redemption following the death or disability of a
shareholder or, in the case of a trust account, following the death or
disability of the grantor. The waiver is available for total or partial
redemptions of shares owned by a person, either individually or in joint tenancy
(with rights of survivorship), at the time of death or initial determination of
disability, provided that the shares were purchased prior to death or
disability.

The CDSC will also be waived in the case of a total or partial redemption in
connection with certain distributions made without penalty under the Internal
Revenue Code for a tax-deferred retirement plan, an IRA or Section 403(b)
custodial account. These distributions include: (i) in the case of a
tax-deferred retirement plan, a lump-sum or other distribution after retirement;
(ii) in the case of an IRA or Section 403(b) custodial account, a lump-sum or
other distribution after attaining age 59 1/2; and (iii) a tax-free return of an
excess contribution or plan distributions following the death or disability of
the shareholder, provided that the shares were purchased prior to death or
disability. The waiver does not apply in the case of a tax-free rollover or
transfer of assets, other than one following a separation from service (I.E.,
following voluntary or involuntary termination of employment or following
retirement). Under no circumstances will the CDSC be waived on redemptions
resulting from the termination of a tax-deferred retirement plan, unless such
redemptions otherwise qualify for a waiver as described above. In the case of
Direct Account and PSI or Subsidiary Prototype Benefit Plans, the CDSC will be
waived on redemptions which represent borrowings from such plans. Shares
purchased with amounts used to repay a loan from such plans on which a CDSC was
not previously deducted will thereafter be subject to a CDSC without regard to
the time such amounts were previously invested. In the case of a 401(k) plan,
the CDSC will also be waived upon the redemption of shares purchased with
amounts used to repay loans made from the account to the participant and from
which a CDSC was previously deducted.

In addition, the CDSC will be waived on redemptions of shares held by a
Director of the Fund.

You must notify the Fund's Transfer Agent either directly or through
Prudential Securities or Prusec, at the time of redemption, that you are
entitled to waiver of the CDSC and provide the Transfer Agent with such
supporting documentation as it may deem appropriate. The waiver will be granted
subject to confirmation of your entitlement. See "Purchase and Redemption of
Fund Shares--Waiver of the Contingent Deferred Sales Charge--Class B Shares" in
the Statement of Additional Information.

A quantity discount may apply to redemptions of Class B shares purchased
prior to August 1, 1994. See "Purchase and Redemption of Fund Shares--Quantity
Discount--Class B Shares Purchased Prior to August 1, 1994" in the Statement of
Additional Information.

25
<PAGE>
CONVERSION FEATURE--CLASS B SHARES

Class B shares will automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. It is currently anticipated that
conversions will occur during the months of February, May, August and November
commencing in February 1995. Conversions will be effected at relative net asset
value without the imposition of any additional sales charge.

Since the Fund tracks amounts paid rather than the number of shares bought
on each purchase of Class B shares, the number of Class B shares eligible to
convert to Class A shares (excluding shares acquired through the automatic
reinvestment of dividends and other distributions) (the Eligible Shares) will be
determined on each conversion date in accordance with the following formula: (i)
the ratio of (a) the amounts paid for Class B shares purchased at least seven
years prior to the conversion date to (b) the total amount paid for all Class B
shares purchased and then held in your account (ii) multiplied by the total
number of Class B shares purchased and then held in your account. Each time any
Eligible Shares in your account convert to Class A shares, all shares or amounts
representing Class B shares then in your account that were acquired through the
automatic reinvestment of dividends and other distributions will convert to
Class A shares.

For purposes of determining the number of Eligible Shares, if the Class B
shares in your account on any conversion date are the result of multiple
purchases at different net asset values per share, the number of Eligible Shares
calculated as described above will generally be either more or less than the
number of shares actually purchased approximately seven years before such
conversion date. For example, if 100 shares were initially purchased at $10 per
share (for a total of $1,000) and a second purchase of 100 shares was
subsequently made at $11 per share (for a total of $1,100), 95.24 shares would
convert approximately seven years from the initial purchase (i.e., $1,000
divided by $2,100 (47.62%), multiplied by 200 shares equals 95.24 shares). The
Manager reserves the right to modify the formula for determining the number of
Eligible Shares in the future as it deems appropriate on notice to shareholders.

Since annual distribution-related fees are lower for Class A shares than
Class B shares, the per share net asset value of the Class A shares may be
higher than that of the Class B shares at the time of conversion. Thus, although
the aggregate dollar value will be the same, you may receive fewer Class A
shares than Class B shares converted. See "How the Fund Values its Shares."

For purposes of calculating the applicable holding period for conversions,
all payments for Class B shares during a month will be deemed to have been made
on the last day of the month, or for Class B shares acquired through exchange,
or a series of exchanges, on the last day of the month in which the original
payment for purchases of such Class B shares was made. For Class B shares
previously exchanged for shares of a money market fund, the time period during
which such shares were held in the money market fund will be excluded. For
example, Class B shares held in a money market fund for one year will not
convert to Class A shares until approximately eight years from purchase. For
purposes of measuring the time period during which shares are held in a money
market fund, exchanges will be deemed to have been made on the last day of the
month. Class B shares acquired through exchange will convert to Class A shares
after expiration of the conversion period applicable to the original purchase of
such shares. The conversion feature described above will not be implemented and,
consequently, the first conversion of Class B shares will not occur before
February, 1995, but as soon thereafter as practicable. At that time all amounts
representing Class B shares then outstanding beyond the applicable conversion
period will automatically convert to Class A shares together with all shares or
amounts representing Class B shares acquired through the automatic reinvestment
of dividends and distributions then held in your account.

The conversion feature may be subject to the continuing availability of
opinions of counsel or rulings of the Internal Revenue Service (i) that the
dividends and other distributions paid on Class A, Class B, and Class C shares
will not constitute "preferential dividends" under the Internal Revenue Code and
(ii) that the conversion of shares does not constitute a taxable event. The
conversion of Class B shares into Class A shares may be suspended if such
opinions or rulings are no longer available. If conversions are suspended, Class
B shares of the Fund will continue to be subject, possibly indefinitely, to
their higher annual distribution and service fee.

26
<PAGE>
HOW TO EXCHANGE YOUR SHARES

As a shareholder of the Fund you have an exchange privilege with certain other
Prudential Mutual Funds, including one or more specified money market funds,
subject to the minimum investment requirements of such funds. Class A, Class B
and Class C shares may be exchanged for Class A, Class B and Class C shares,
respectively, of another fund on the basis of the relative NAV. No sales charge
will be imposed at the time of the exchange. Any applicable CDSC payable upon
the redemption of shares exchanged will be calculated from the first day of the
month after the initial purchase, excluding the time shares were held in a money
market fund. Class B and Class C shares may not be exchanged into money market
funds other than Prudential Special Money Market Fund. For purposes of
calculating the holding period applicable to the Class B conversion feature, the
time period during which Class B shares were held in a money market fund will be
excluded. See "Conversion Feature--Class B Shares" above. An exchange will be
treated as a redemption and purchase for tax purposes. See "Shareholder
Investment Account--Exchange Privilege" in the Statement of Additional
Information.

In order to exchange shares by telephone, you must authorize telephone
exchanges on your initial application form or by written notice to the Transfer
Agent and hold shares in non-certificate form. Thereafter, you may call the Fund
at (800) 225-1852 to execute a telephone exchange of shares, on weekdays, except
holidays, between the hours of 8:00 A.M. and 6:00 P.M., New York time. For your
protection and to prevent fraudulent exchanges, your telephone call will be
recorded and you will be asked to provide your personal identification number. A
written confirmation of the exchange transaction will be sent to you. Neither
the Fund nor its agents will be liable for any loss, liability or cost which
results from acting upon instructions reasonably believed to be genuine under
the foregoing procedures. All exchanges will be made on the basis of the
relative NAV of the two funds next determined after the request is received in
good order. The Exchange Privilege is available only in states where the
exchange may legally be made.

If you hold shares through Prudential Securities, you must exchange your
shares by contacting your Prudential Securities financial adviser.

If you hold certificates, the certificates, signed in the name(s) shown on
the face of the certificates, must be returned in order for the shares to be
exchanged. See "How to Sell Your Shares" above.

You may also exchange shares by mail by writing to Prudential Mutual Fund
Services, Inc., Attention: Exchange Processing, P.O. Box 15010, New Brunswick,
New Jersey 08906-5010.

In periods of severe market or economic conditions the telephone exchange of
shares may be difficult to implement and you should make exchanges by mail by
writing to Prudential Mutual Fund Services, Inc., at the address noted above.

Special Exchange Privilege. Commencing in February 1995, a special exchange
privilege is available for shareholders who qualify to purchase Class A shares
at NAV. See "Alternative Purchase Plan--Class A Shares--Reduction and Waiver of
Initial Sales Charges" above. Under this exchange privilege, amounts
representing any Class B and Class C shares (which are not subject to a CDSC)
held in such a shareholder's account will be automatically exchanged for Class A
shares on a quarterly basis, unless the shareholder elects otherwise. It is
currently anticipated that this exchange will occur quarterly in February, May,
August and November. Eligibility for this exchange privilege will be calculated
on the business day prior to the date of the exchange. Amounts representing
Class B or Class C shares which are not subject to a CDSC include the following:
(1) amounts representing Class B or Class C shares acquired pursuant to the
automatic reinvestment of dividends and distributions, (2) amounts representing
the increase in the net asset value above the total amount of payments for the
purchase of Class B or Class C shares and (3) amounts representing Class B or
Class C shares held beyond the applicable CDSC period. Class B and Class C
shareholders must notify the Transfer Agent either directly or through
Prudential Securities or Prusec that they are eligible for this special exchange
privilege.

The Exchange Privilege may be modified or terminated at any time on 60 days'
notice to shareholders.

27
<PAGE>
SHAREHOLDER SERVICES

In addition to the exchange privilege, as a shareholder in the Fund, you can
take advantage of the following additional services and privileges:

- Automatic Reinvestment of Dividends and/or Distributions Without a Sales
Charge. For your convenience, all dividends and distributions are automatically
reinvested in full and fractional shares of the Fund at NAV without a sales
charge. You may direct the Transfer Agent in writing not less than 5 full
business days prior to the record date to have subsequent dividends and/or
distributions sent in cash rather than reinvested. If you hold shares through
Prudential Securities, you should contact your financial adviser.

- Automatic Savings Accumulation Plan (ASAP). Under ASAP you may make regular
purchases of the Fund's shares in amounts as little as $50 via an automatic
debit to a bank account or Prudential Securities account (including a Command
Account). For additional information about this service, you may contact your
Prudential Securities financial adviser, Prusec representative or the Transfer
Agent directly.

- Tax-Deferred Retirement Plans. Various tax-deferred retirement plans,
including a 401(k) plan, self-directed individual retirement accounts and
"tax-sheltered accounts" under Section 403(b)(7) of the Internal Revenue Code
are available through the Distributor. These plans are for use by both
self-employed individuals and corporate employers. These plans permit either
self-direction of accounts by participants, or a pooled account arrangement.
Information regarding the establishment of these plans, the administration,
custodial fees and other details is available from Prudential Securities or the
Transfer Agent. If you are considering adopting such a plan, you should consult
with your own legal or tax adviser with respect to the establishment and
maintenance of such a plan.

- Systematic Withdrawal Plan. A systematic withdrawal plan is available to
shareholders which provides for monthly or quarterly checks. Withdrawals of
Class B and Class C shares may be subject to a CDSC. See "How to Sell Your
Shares-- Contingent Deferred Sales Charges."

- Reports to Shareholders. The Fund will send you annual and semi-annual
reports. The financial statements appearing in annual reports are audited by
independent accountants. In order to reduce duplicate mailing and printing
expenses, the Fund will provide one annual and semi-annual shareholder report
and annual prospectus per household. You may request additional copies of such
reports by calling (800) 225-1852 or by writing to the Fund at One Seaport
Plaza, New York, New York 10292. In addition, monthly unaudited financial data
are available upon request from the Fund.

- Shareholder Inquiries. Inquiries should be addressed to the Fund at One
Seaport Plaza, New York, New York 10292, or by telephone at (800) 225-1852
(toll-free) or, from outside the U.S.A., at (908) 417-7555 (collect).

For additional information regarding the services and privileges described
above, see "Shareholder Investment Account" in the Statement of Additional
Information.

28
<PAGE>
THE PRUDENTIAL MUTUAL FUND FAMILY
Prudential Mutual Fund Management offers a broad range of mutual funds
designed to meet your individual needs. We welcome you to review the investment
options available through our family of funds. For more information on the
Prudential Mutual Funds, including charges and expenses, contact your Prudential
Securities financial adviser or Prusec representative or telephone the Funds at
(800) 225-1852 for a free prospectus. Read the prospectus carefully before you
invest or send money.

Taxable Bond Funds
Prudential Adjustable Rate Securities Fund, Inc.
Prudential Diversified Bond Fund, Inc.
Prudential GNMA Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential Structured Maturity Fund, Inc.
Income Portfolio
Prudential U.S. Government Fund
The BlackRock Government Income Trust

Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Yield Series
Insured Series
Modified Term Series
Prudential Municipal Series Fund
Arizona Series
Florida Series
Georgia Series
Hawaii Income Series
Maryland Series
Massachusetts Series
Michigan Series
Minnesota Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.

Global Funds
Prudential Europe Growth Fund, Inc.
Prudential Global Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Global Natural Resources Fund, Inc.
Prudential Intermediate Global Income Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio
Short-Term Global Income Portfolio
Global Utility Fund, Inc.

Equity Funds
Prudential Allocation Fund
Conservatively Managed Portfolio
Strategy Portfolio
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Growth Opportunity Fund, Inc.
Prudential IncomeVertible-Registered Trademark- Fund, Inc.
Prudential Multi-Sector Fund, Inc.
Prudential Strategist Fund, Inc.
Prudential Utility Fund, Inc.
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund

Money Market Funds
-TAXABLE MONEY MARKET FUNDS
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund
Money Market Series
Prudential MoneyMart Assets
-TAX-FREE MONEY MARKET FUNDS
Prudential Tax-Free Money Fund
Prudential California Municipal Fund
California Money Market Series
Prudential Municipal Series Fund
Connecticut Money Market Series
Massachusetts Money Market Series
New Jersey Money Market Series
New York Money Market Series
-COMMAND FUNDS
Command Money Fund
Command Government Fund
Command Tax-Free Fund
-INSTITUTIONAL MONEY MARKET FUNDS
Prudential Institutional Liquidity Portfolio, Inc.
Institutional Money Market Series

A-1
<PAGE>
No dealer, sales representative or any other person has been authorized to give
any information or to make any representations, other than those contained in
this Prospectus, in connection with the offer contained herein, and, if given or
made, such other information or representations must not be relied upon as
having been authorized by the Fund or the Distributor. This Prospectus does not
constitute an offer by the Fund or by the Distributor to sell or a solicitation
of any offer to buy any of the securities offered hereby in any jurisdiction to
any person to whom it is unlawful to make such offer in such jurisdiction.

-------------------------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
Page
---
<S> <C>
FUND HIGHLIGHTS................................. 2
Risk Factors and Special Characteristics...... 2
FUND EXPENSES................................... 4
FINANCIAL HIGHLIGHTS............................ 5
HOW THE FUND INVESTS............................ 8
Investment Objective and Policies............. 8
Hedging and Return Enhancement Strategies..... 9
Other Investments and Policies................ 11
Investment Restrictions....................... 12
HOW THE FUND IS MANAGED......................... 12
Manager....................................... 13
Distributor................................... 13
Portfolio Transactions........................ 15
Custodian and Transfer and Dividend Disbursing
Agent........................................ 15
HOW THE FUND VALUES ITS SHARES.................. 16
HOW THE FUND CALCULATES PERFORMANCE............. 16
TAXES, DIVIDENDS AND DISTRIBUTIONS.............. 17
GENERAL INFORMATION............................. 18
Description of Common Stock................... 18
Additional Information........................ 19
SHAREHOLDER GUIDE............................... 19
How to Buy Shares of the Fund................. 19
Alternative Purchase Plan..................... 20
How to Sell Your Shares....................... 23
Conversion Feature--Class B Shares............ 25
How to Exchange Your Shares................... 26
Shareholder Services.......................... 27
THE PRUDENTIAL MUTUAL FUND FAMILY............... A-1
</TABLE>

- -------------------------------------------
MF109A 44401I

74435E 10
Class A: 9
74435E 20
CUSIP Nos.: Class B: 8
74435E 30
Class C: 7

Prudential
Growth Opportunity
Fund, Inc.
- --------------------

February 1, 1995

PRUDENTIAL MUTUAL FUNDS
BUILDING YOUR FUTURE
r
ON OUR STRENGTH-SM-
<PAGE>
Prudential Mutual Funds
Supplement dated July 3, 1995

The following information supplements the prospectuses of each of the Funds
listed on the reverse.

SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND

Reduction and Waiver of Initial Sales Charges.

PruArray Plans. Class A shares may be purchased at NAV by certain retirement
and deferred compensation plans, qualified or non-qualified under the Internal
Revenue Code of 1986, as amended, (the Code), including pension, profit-sharing,
stock-bonus or other employee benefit plans under Section 401 of the Code and
deferred compensation and annuity plans under Sections 457 and 403(b)(7) of the
Code that participate in the Transfer Agent's PruArray Program (a benefit plan
record keeping service) (hereafter referred to as a PruArray Plan); provided (i)
that the plan has at least $1 million in existing assets or 1,000 eligible
employees or participants and (ii) that Prudential Mutual Funds constitute at
least one-half of the plan's investment options. The term ``existing assets''
for this purpose includes stock issued by a PruArray Plan sponsor and shares of
non-money market Prudential Mutual Funds and shares of certain unaffiliated
non-money market mutual funds that participate in the PruArray Program
(Participating Funds). ``Existing assets'' also include shares of money market
funds acquired by exchange from a Participating Fund. After a PruArray Plan
qualifies to purchase Class A shares at NAV, all subsequent purchases will be
made at NAV.

<PAGE>

Listed below are the names of the Prudential Mutual Funds and the dates of
the prospectuses to which this supplement relates.

<TABLE>
<CAPTION>
Name of Fund Prospectus Date
<S> <C>
Prudential Adjustable Rate Securities Fund, Inc. June 26, 1995
Prudential Allocation Fund September 29, 1994
Prudential Diversified Bond Fund, Inc. January 3, 1995
(as supplemented June 20, 1995)
Prudential Equity Fund, Inc. February 28, 1995
Prudential Equity Income Fund December 30, 1994
Prudential Global Fund, Inc. January 3, 1995
Prudential Global Genesis Fund, Inc. August 1, 1994
Prudential Global Natural Resources Fund, Inc. August 1, 1994
Prudential GNMA Fund, Inc. March 2, 1995
Prudential Government Income Fund, Inc. May 1, 1995
Prudential Growth Opportunity Fund, Inc. February 1, 1995
Prudential High Yield Fund, Inc. February 28, 1995
Prudential IncomeVertible Fund, Inc. March 1, 1995
Prudential Intermediate Global Income Fund, Inc. March 2, 1995
Prudential Multi-Sector Fund, Inc. June 30, 1995
Prudential Pacific Growth Fund, Inc. January 3, 1995
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio January 3, 1995
Short-Term Global Income Fund January 3, 1995
Prudential Structured Maturity Fund, Inc. March 1, 1995
Prudential U.S. Government Fund January 3, 1995
Prudential Utility Fund, Inc. March 1, 1995
The BlackRock Government Income Trust November 1, 1994
(as supplemented December 30, 1994)
Global Utility Fund, Inc. February 1, 1995
Nicholas-Applegate Fund, Inc. March 6, 1995
</TABLE>

MF950C-7

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

Supplement dated July 10, 1995 to
Prospectus dated February 1, 1995

HOW THE FUND IS MANAGED

MANAGER

Effective July 1995, Roger E. Ford, a Managing Director of The Prudential
Investment Corporation (PIC), became the portfolio manager of the Fund. Mr.
Ford has responsibility for the day-to-day management of the Fund's portfolio
and a number of other portfolios advised by PIC. Mr. Ford has been employed by
PIC as a portfolio manager since 1972.

<PAGE>
PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 1, 1995

Prudential Growth Opportunity Fund, Inc. (the Fund), is an open-end
diversified management investment company whose objective is capital growth. The
Fund intends to invest principally in a carefully selected portfolio of common
stocks, generally stocks having prospects of a high return on equity, increasing
earnings, increasing dividends (or an expectation of dividends), and price
earnings ratios which are not excessive. The Fund's purchase and sale of put and
call options and related short-term trading may result in a high portfolio
turnover rate. These activities may be considered speculative and may result in
higher risks and costs to the Fund. The Fund may also buy and sell stock index
futures and may buy and sell options on stock indices pursuant to limits
described herein. There can be no assurance that the Fund's investment objective
will be achieved. See "Investment Objective and Policies."

The Fund's address is One Seaport Plaza, New York, New York 10292, and its
telephone number is (800) 225-1852.

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus, dated February 1, 1995. A copy
of the Prospectus may be obtained from the Fund upon request.

TABLE OF CONTENTS

<TABLE>
<CAPTION>
CROSS- REFERENCE
TO PAGE IN
PAGE PROSPECTUS
---- ---------------
<S> <C> <C>
General Information................................... B-2 20
Investment Objective and Policies..................... B-2 8
Investment Restrictions............................... B-7 12
Directors and Officers................................ B-8 12
Manager............................................... B-11 13
Distributor........................................... B-12 13
Portfolio Transactions and Brokerage.................. B-15 15
Purchase and Redemption of Fund Shares................ B-16 19
Shareholder Investment Account........................ B-19 27
Net Asset Value....................................... B-22 16
Performance Information............................... B-23 16
Taxes................................................. B-25 17
Custodian, Transfer and Dividend Disbursing Agent and
Independent Accountants.............................. B-26 15
Financial Statements.................................. B-27 --
Report of Independent Accountants..................... B-37 --
</TABLE>

- --------------------------------------------------------------------------------

MF109B 444081A
<PAGE>
GENERAL INFORMATION

At a special meeting held on July 19, 1994, shareholders approved an
amendment to the Fund's Articles of Incorporation to change the Fund's name from
Prudential-Bache Growth Opportunity Fund, Inc. to Prudential Growth Opportunity
Fund, Inc.

INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is capital growth. It attempts to achieve
such objective by investing principally in a carefully selected portfolio of
common stocks. There can be no assurance that the Fund's investment objective
will be achieved. See "How the Fund Invests--Investment Objective and Policies"
in the Prospectus.

The investment adviser believes that, in seeking to attain capital
appreciation, it is important to attempt to minimize losses. Accordingly, the
investment adviser will attempt to anticipate periods when stock prices
generally decline. When, in the investment adviser's judgment, such a period is
imminent, the Fund will take defensive measures, such as investing all or part
of the Fund's assets in money market instruments during this period. The Fund
may also purchase put options on stocks that the Fund holds as protection
against a significant price decline and may purchase and sell stock index
options and futures to hedge overall market risk and the investment of cash
flows.

The Fund may invest without limit in high quality money market instruments
(a) when conditions dictate a temporary defensive strategy, (b) until the
proceeds from the sale of the Fund's shares have been invested or (c) during
temporary periods of portfolio restructuring. Such instruments may include
commercial paper of domestic corporations, certificates of deposit, repurchase
agreements, bankers' acceptances and other obligations of domestic banks, and
obligations issued or guaranteed by the United States Government, its
instrumentalities or its agencies.

LIMITATIONS ON PURCHASE AND SALE OF STOCK OPTIONS, OPTIONS ON STOCK INDICES AND
STOCK INDEX FUTURES

The Fund may write put and call options on stocks only if they are covered,
and such options must remain covered so long as the Fund is obligated as a
writer. The Fund has undertaken with certain state securities commissions that,
so long as shares of the Fund are registered in those states, it will not (a)
write puts having aggregate exercise prices greater than 25% of total net
assets; or (b) purchase (i) put options on stocks not held in the Fund's
portfolio, (ii) put options on stock indices or (iii) call options on stocks or
stock indices if, after any such purchase, the aggregate premiums paid for such
options would exceed 20% of the Fund's total net assets.

CALL OPTIONS ON STOCK. The Fund may, from time to time, write call options
on its portfolio securities. The Fund may write only call options which are
"covered," meaning that the Fund either owns the underlying security or has an
absolute and immediate right to acquire that security, without additional cash
consideration, upon conversion or exchange of other securities currently held in
its portfolio. In addition, the Fund will not permit the call to become
uncovered prior to the expiration of the option or termination through a closing
purchase transaction as described below. If the Fund writes a call option, the
purchaser of the option has the right to buy (and the Fund has the obligation to
sell) the underlying security at the exercise price throughout the term of the
option. The amount paid to the Fund by the purchaser of the option is the
"premium." The Fund's obligation to deliver the underlying security against
payment of the exercise price would terminate either upon expiration of the
option or earlier if the Fund were to effect a "closing purchase transaction"
through the purchase of an equivalent option on an exchange. There can be no
assurance that a closing purchase transaction can be effected.

The Fund would not be able to effect a closing purchase transaction after it
had received notice of exercise. In order to write a call option, the Fund is
required to comply with the rules of The Options Clearing Corporation and the
various exchanges with respect to collateral requirements. The Fund may not
purchase call options except in connection with a closing purchase transaction.
It is possible that the cost of effecting a closing purchase transaction may be
greater than the premium received by the Fund for writing the option.

Generally, the investment adviser intends to write listed covered call
options during periods when it anticipates declines in the market values of
portfolio securities because the premiums received may offset to some extent the
decline in the Fund's net asset value occasioned by such declines in market
value. Except as part of the "sell discipline" described below, the investment
adviser will generally not write listed covered call options when it anticipates
that the market values of the Fund's portfolio securities will increase.

B-2
<PAGE>
One reason for the Fund to write call options is as part of a "sell
discipline." If the investment adviser decides that a portfolio security would
be overvalued and should be sold at a certain price higher than the current
price, the Fund could write an option on the stock at the higher price. Should
the stock subsequently reach that price and the option be exercised, the Fund
would, in effect, have increased the selling price of that stock, which it would
have sold at that price in any event, by the amount of the premium. In the event
the market price of the stock declined and the option were not exercised, the
premium would offset all or some portion of the decline. It is possible that the
price of the stock could increase beyond the exercise price; in that event, the
Fund would forego the opportunity to sell the stock at that higher price.

In addition, call options may be used as part of a different strategy in
connection with sales of portfolio securities. If, in the judgment of the
investment adviser, the market price of a stock is overvalued and it should be
sold, the Fund may elect to write a call option with an exercise price
substantially below the current market price. As long as the value of the
underlying security remains above the exercise price during the term of the
option, the option will, in all probability, be exercised, in which case the
Fund will be required to sell the stock at the exercise price. If the sum of the
premium and the exercise price exceeds the market price of the stock at the time
the call option is written, the Fund would, in effect, have increased the
selling price of the stock. The Fund would not write a call option in these
circumstances if the sum of the premium and the exercise price were less than
the current market price of the stock.

PUT OPTIONS ON STOCK. The Fund may also write listed put options. If the
Fund writes a put option, it is obligated to purchase a given security at a
specified price at any time during the term of the option.

Writing listed put options is a useful portfolio investment strategy when
the Fund has cash or other reserves available for investment as a result of
sales of Fund shares or, more importantly, because the investment adviser
believes a more defensive and less fully invested position is desirable in light
of market conditions. If the Fund wishes to invest its cash or reserves in a
particular security at a price lower than current market value, it may write a
put option on that security at an exercise price which reflects the lower price
it is willing to pay. The buyer of the put option generally will not exercise
the option unless the market price of the underlying security declines to a
price near or below the exercise price. If the Fund writes a listed put, the
price of the underlying stock declines and the option is exercised, the premium,
net of transaction charges, will reduce the purchase price paid by the Fund for
the stock. The price of the stock may decline by an amount in excess of the
premium, in which event the Fund would have foregone an opportunity to purchase
the stock at a lower price.

If, prior to the exercise of a put option, the investment adviser determines
that it no longer wishes to invest in the stock on which the put option had been
written, the Fund may be able to effect a closing purchase transaction on an
exchange by purchasing a put option of the same series as the one which it has
previously written. The cost of effecting a closing purchase transaction may be
greater than the premium received on writing the put option and there is no
guarantee that a closing purchase transaction can be effected.

At the time a put option is written, the Fund will be required to establish,
and will maintain until the put is exercised or has expired, a segregated
account with its custodian consisting of cash, short-term U. S. Government
securities or other high-grade short-term debt obligations equal in value to the
amount the Fund will be obligated to pay upon exercise of the put option.

STOCK INDEX OPTIONS. Except as described below, the Fund will write call
options on indices only if on such date it holds a portfolio of stocks at least
equal to the value of the index times the multiplier times the number of
contracts. When the Fund writes a call option on a broadly-based stock market
index, the Fund will segregate or put into escrow with its Custodian, or pledge
to a broker as collateral for the option, one or more "qualified securities"
with a market value at the time the option is written of not less than 100% of
the current index value times the multiplier times the number of contracts.

If the Fund has written an option on an industry or market segment index, it
will segregate or put into escrow with its Custodian, or pledge to a broker as
collateral for the option, at least ten "qualified securities," which are
securities of an issuer in such industry or market segment, with a market value
at the time the option is written of not less than 100% of the current index
value times the multiplier times the number of contracts. Such securities will
include stocks which represent at least 50% of the weighting of the industry or
market segment index and will represent at least 50% of the Fund's holdings in
that industry or market segment. No individual security will represent more than
25% of the amount so segregated, pledged or escrowed. If at the close of
business on any day the market value of such qualified securities so segregated,
escrowed or pledged falls below 100% of the current index value times the
multiplier times the number of contracts, the Fund will so segregate, escrow or
pledge an amount in cash, Treasury bills or other high-grade short-term
obligations equal in value to the difference. In addition, when the Fund writes
a call on an index which is in-the-money at the time the call is written, the
Fund will segregate with its Custodian or

B-3
<PAGE>
pledge to the broker as collateral cash, short-term U.S. Government securities
or other high-grade short-term debt obligations equal in value to the amount by
which the call is in-the-money times the multiplier times the number of
contracts. Any amount segregated pursuant to the foregoing sentence may be
applied to the Fund's obligation to segregate additional amounts in the event
that the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts. A
"qualified security" is an equity security which is listed on a national
securities exchange or listed on the National Association of Securities Dealers
Automated Quotation System against which the Fund has not written a stock call
option and which has not been hedged by the Fund by the sale of stock index
futures. However, if the Fund holds a call on the same index as the call written
where the exercise price of the call held is equal to or less than the exercise
price of the call written or greater than the exercise price of the call written
if the difference is maintained by the Fund in cash, Treasury bills or other
high-grade short-term obligations in a segregated account with its Custodian, it
will not be subject to the requirements described in this paragraph.

STOCK INDEX FUTURES. The Fund will engage in transactions in stock index
futures contracts as a hedge against changes resulting from market conditions in
the values of securities which are held in the Fund's portfolio or which it
intends to purchase. The Fund will engage in such transactions when they are
economically appropriate for the reduction of risks inherent in the ongoing
management of the Fund. The Fund may not purchase or sell stock index futures
if, immediately thereafter, more than one-third of its net assets would be
hedged and, in addition, except as described above in the case of a call written
and held on the same index, will write call options on indices or sell stock
index futures only if the amount resulting from the multiplication of the then
current level of the index (or indices) upon which the option or future
contract(s) is based, the applicable multiplier(s), and the number of futures or
options contracts which would be outstanding, would not exceed one-third of the
value of the Fund's net assets. In instances involving the purchase of stock
index futures contracts by the Fund, an amount of cash, short-term
U.S.Government securities or other high-grade short-term debt obligations, equal
to the market value of the futures contracts, will be deposited in a segregated
account with the Fund's Custodian and/or in a margin account with a broker to
collateralize the position and thereby insure that the use of such futures is
unleveraged.

Under regulations of the Commodity Exchange Act, investment companies
registered under the Investment Company Act of 1940, as amended (the Investment
Company Act), are exempt from the definition of "commodity pool operator,"
provided all of the Fund's commodity futures or commodity options transactions
constitute BONA FIDE hedging transactions within the meaning of the CFTC's
regulations. The Fund will use stock index futures and options on futures as
described herein in a manner consistent with this requirement.

RISKS OF TRANSACTIONS IN STOCK OPTIONS. Writing options involves the risk
that there will be no market in which to effect a closing transaction. An option
position may be closed out only on an exchange which provides a secondary market
for an option of the same series. Although the Fund will generally write only
those options for which there appears to be an active secondary market, there is
no assurance that a liquid secondary market on an exchange will exist for any
particular option, or at any particular time, and for some options no secondary
market on an exchange may exist. If the Fund as a covered call option writer is
unable to effect a closing purchase transaction in a secondary market, it will
not be able to sell the underlying security until the option expires or it
delivers the underlying security upon exercise.

RISKS OF OPTIONS ON INDICES. The Fund's purchase and sale of options on
indices will be subject to risks described above under "Risks of Transactions in
Stock Options." In addition, the distinctive characteristics of options on
indices create certain risks that are not present with stock options.

Because the value of an index option depends upon movements in the level of
the index rather than the price of a particular stock, whether the Fund will
realize a gain or loss on the purchase or sale of an option on an index depends
upon movements in the level of stock prices in the stock market generally or in
an industry or market segment rather than movements in the price of a particular
stock. Accordingly, successful use by the Fund of options on indices would be
subject to the investment adviser's ability to predict correctly movements in
the direction of the stock market generally or of a particular industry. This
requires different skills and techniques than predicting changes in the price of
individual stocks.

Index prices may be distorted if trading of certain stocks included in the
index is interrupted. Trading in the index options also may be interrupted in
certain circumstances, such as if trading were halted in a substantial number of
stocks included in the index. If this occurred, the Fund would not be able to
close out options which it had purchased or written and, if restrictions on
exercise were imposed, may be unable to exercise an option it holds, which could
result in substantial losses to the Fund. It is the Fund's policy to purchase or
write options only on indices which include a number of stocks sufficient to
minimize the likelihood of a trading halt in the index.

B-4
<PAGE>
Trading in index options commenced in April 1983 with the S&P 100 option
(formerly called the CBOE 100). Since that time a number of additional index
option contracts have been introduced including options on industry indices.
Although the markets for certain index option contracts have developed rapidly,
the markets for other index options are still relatively illiquid. The ability
to establish and close out positions on such options will be subject to the
development and maintenance of a liquid secondary market. It is not certain that
this market will develop in all index option contracts. The Fund will not
purchase or sell any index option contract unless and until, in the investment
adviser's opinion, the market for such options has developed sufficiently that
such risk in connection with such transactions is no greater than such risk in
connection with options on stocks.

SPECIAL RISKS OF WRITING CALLS ON INDICES. Because exercises of index
options are settled in cash, a call writer such as the Fund cannot determine the
amount of its settlement obligations in advance and, unlike call writing on
specific stocks, cannot provide in advance for, or cover, its potential
settlement obligations by acquiring and holding the underlying securities.
However, the Fund will write call options on indices only under the
circumstances described above under "Limitations on Purchase and Sale of Stock
Options, Options on Stock Indices, Stock Index Futures and Options on Stock
Index Futures."

Price movements in the Fund's portfolio probably will not correlate
precisely with movements in the level of the index and, therefore, the Fund
bears the risk that the price of the securities held by the Fund may not
increase as much as the index. In such event, the Fund would bear a loss on the
call which is not completely offset by movements in the price of the Fund's
portfolio. It is also possible that the index may rise when the Fund's portfolio
of stocks does not rise. If this occurred, the Fund would experience a loss on
the call which is not offset by an increase in the value of its portfolio and
might also experience a loss in its portfolio. However, because the value of a
diversified portfolio will, over time, tend to move in the same direction as the
market, movements in the value of the Fund in the opposite direction as the
market would be likely to occur for only a short period or to a small degree.

Unless the Fund has other liquid assets which are sufficient to satisfy the
exercise of a call, the Fund would be required to liquidate portfolio securities
in order to satisfy the exercise. Because an exercise must be settled within
hours after receiving the notice of exercise, if the Fund fails to anticipate an
exercise, it may have to borrow (in amounts not exceeding 20% of the Fund's
total assets) pending settlement of the sale of securities in its portfolio and
would incur interest charges thereon.

When the Fund has written a call, there is also a risk that the market may
decline between the time the Fund has a call exercised against it, at a price
which is fixed as of the closing level of the index on the date of exercise, and
the time the Fund is able to sell stocks in its portfolio. As with stock
options, the Fund will not learn that an index option has been exercised until
the day following the exercise date but, unlike a call on stock where the Fund
would be able to deliver the underlying securities in settlement, the Fund may
have to sell part of its stock portfolio in order to make settlement in cash,
and the price of such stocks might decline before they can be sold. This timing
risk makes certain strategies involving more than one option substantially more
risky with index options than with stock options. For example, even if an index
call which the Fund has written is "covered" by an index call held by the Fund
with the same strike price, the Fund will bear the risk that the level of the
index may decline between the close of trading on the date the exercise notice
is filed with the clearing corporation and the close of trading on the date the
Fund exercises the call it holds or the time the Fund sells the call which in
either case would occur no earlier than the day following the day the exercise
notice was filed.

SPECIAL RISKS OF PURCHASING PUTS AND CALLS ON INDICES. If the Fund holds an
index option and exercises it before final determination of the closing index
value for that day, it runs the risk that the level of the underlying index may
change before closing. If such a change causes the exercised option to fall
out-of-the-money, the Fund will be required to pay the difference between the
closing index value and the exercise price of the option (times the applicable
multiple) to the assigned writer. Although the Fund may be able to minimize this
risk by withholding exercise instructions until just before the daily cut off
time or by selling rather than exercising an option when the index level is
close to the exercise price, it may not be possible to eliminate this risk
entirely because the cut off times for index options may be earlier than those
fixed for other types of options and may occur before definitive closing index
values are announced.

B-5
<PAGE>
ILLIQUID SECURITIES

The Fund may not invest more than 10% of its net assets in repurchase
agreements which have a maturity of longer than seven days or in other illiquid
securities, including securities that are illiquid by virtue of the absence of a
readily available market or legal or contractual restrictions on resale.
Historically, illiquid securities have included securities subject to
contractual or legal restrictions on resale because they have not been
registered under the Securities Act of 1933, as amended (Securities Act),
securities which are otherwise not readily marketable and repurchase agreements
having a maturity of longer than seven days. Securities which have not been
registered under the Securities Act are referred to as private placements or
restricted securities and are purchased directly from the issuer or in the
secondary market. Mutual funds do not typically hold a significant amount of
these restricted or other illiquid securities because of the potential for
delays on resale and uncertainty in valuation. Limitations on resale may have an
adverse effect on the marketability of portfolio securities and a mutual fund
might be unable to dispose of restricted or other illiquid securities promptly
or at reasonable prices and might thereby experience difficulty satisfying
redemptions within seven days. A mutual fund might also have to register such
restricted securities in order to dispose of them resulting in additional
expense and delay. Adverse market conditions could impede such a public offering
of securities.

In recent years, however, a large institutional market has developed for
certain securities that are not registered under the Securities Act including
repurchase agreements, commercial paper, foreign securities, municipal
securities, convertible and corporate bonds and notes. Institutional investors
depend on an efficient institutional market in which the unregistered security
can be readily resold on an issuer's ability to honor a demand for repayment.
The fact that there are contractual or legal restrictions on resale to the
general public or to certain institutions may not be indicative of the liquidity
of such investments.

Rule 144A under the Securities Act allows for a broader institutional
trading market for securities otherwise subject to restriction on resale to the
general public. Rule 144A establishes a "safe harbor" from the registration
requirements of the Securities Act for resales of certain securities to
qualified institutional buyers. The investment adviser anticipates that the
market for certain restricted securities such as institutional commercial paper
and foreign securities will expand further as a result of this regulation and
the development of automated systems for the trading, clearance and settlement
of unregistered securities of domestic and foreign issuers, such as the PORTAL
System sponsored by the National Association of Securities Dealers, Inc.

Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act and commercial paper for which there is a readily available
market will not be deemed to be illiquid. The investment adviser will monitor
the liquidity of such restricted securities subject to the supervision of the
Board of Directors. In reaching liquidity decisions, the investment adviser will
consider, INTER ALIA, the following factors: (1) the frequency of trades and
quotes for the security; (2) the number of dealers wishing to purchase or sell
the security and the number of other potential purchasers; (3) dealer
undertakings to make a market in the security; and (4) the nature of the
security and the nature of the marketplace trades (E.G., the time needed to
dispose of the security, the method of soliciting offers and the mechanics of
the transfer). In addition, in order for commercial paper that is issued in
reliance on Section 4(2) of the Securities Act to be considered liquid, (i) it
must be rated in one of the two highest rating categories by at least two
nationally recognized statistical rating organizations (NRSRO), or if only one
NRSRO rates the securities, by that NRSRO, or, if unrated, be of comparable
quality in the view of the investment adviser; and (ii) it must not be "traded
flat" (I.E., without accrued interest) or in default as to principal or
interest. Repurchase agreements subject to demand are deemed to have a maturity
equal to the notice period.

PORTFOLIO TURNOVER

The Fund anticipates that its annual portfolio turnover rate will not exceed
150% in normal circumstances. For the years ended September 30, 1993 and 1994,
the Fund's portfolio turnover rate was 68% and 82%, respectively.

B-6
<PAGE>
INVESTMENT RESTRICTIONS

The following restrictions are fundamental policies. Fundamental policies
are those which cannot be changed without the approval of the holders of a
majority of the Fund's outstanding voting securities. A "majority of the Fund's
outstanding voting securities," when used in this Statement of Additional
Information, means the lesser of (i) 67% of the voting shares represented at a
meeting at which more than 50% of the outstanding voting shares are present in
person or represented by proxy or (ii) more than 50% of the outstanding voting
shares.

The Fund may not:

(1) With respect to 75% of the Fund's total assets, invest more than 5% of
the value of its total assets in the securities of any one issuer (other than
obligations issued or guaranteed by the United States Government, its agencies
or instrumentalities). It is the current policy (but not a fundamental policy)
of the Fund not to invest more than 5% of the value of its total assets in
securities of any one issuer.

(2) Purchase more than 10% of the outstanding voting securities of any one
issuer.

(3) Invest more than 25% of the value of its total assets in securities of
issuers in any one industry. This restriction does not apply to obligations
issued or guaranteed by the United States Government or its agencies or
instrumentalities.

(4) Invest more than 5% of the value of its total assets in securities of
issuers having a record, together with predecessors, of less than three years of
continuous operation. This restriction shall not apply to any obligation issued
or guaranteed by the United States Government, its agencies or
instrumentalities.

(5) Purchase or sell real estate or interests therein, although the Fund may
purchase securities of issuers which engage in real estate operations and
securities which are secured by real estate or interests therein.

(6) Purchase or sell commodities or commodity futures contracts, except
financial futures contracts as described under "Investment Objective and
Policies" in the Prospectus and this Statement of Additional Information.

(7) Purchase oil, gas or other mineral leases, rights or royalty contracts
or exploration or development programs, except that the Fund may invest in the
securities of companies which operate, invest in or sponsor such programs.

(8) Purchase securities of other investment companies except in connection
with a merger, consolidation, reorganization or acquisition of assets.

(9) Issue senior securities, borrow money or pledge its assets, except that
the Fund may borrow up to 20% of the value of the total assets (calculated when
the loan is made) for temporary, extraordinary or emergency purposes or for the
clearance of transactions. The Fund may pledge up to 20% of the value of its
total assets to secure such borrowings. Secured borrowings may take the form of
reverse repurchase agreements, pursuant to which the Fund would sell portfolio
securities for cash and simultaneously agree to repurchase them at a specified
date for the same amount of cash plus an interest component. For purposes of
this restriction, obligations of the Fund to Directors pursuant to deferred
compensation arrangements, the purchase and sale of securities on a when-issued
or delayed delivery basis, the purchase and sale of financial futures contracts
and options and collateral arrangements with respect to margins for financial
futures contracts and with respect to options are not deemed to be the issuance
of a senior security or a pledge of assets.

(10) Make loans of money or securities, except by the purchase of debt
obligations in which the Fund may invest consistently with its investment
objective and policies or by investment in repurchase agreements.

(11) Make short sales of securities except short sales against-the-box.

(12) Purchase securities on margin, except for such short-term loans as are
necessary for the clearance of purchases of portfolio securities. (For the
purpose of this restriction, the deposit or payment by the Fund of initial or
maintenance margin in connection with financial futures contracts is not
considered the purchase of a security on margin.)

(13) Engage in the underwriting of securities, except insofar as the Fund
may be deemed an underwriter under the Securities Act of 1933, as amended (the
"Securities Act"), in disposing of a portfolio security.

(14) Invest for the purpose of exercising control or management of any other
issuer.

B-7
<PAGE>
Whenever any fundamental investment policy or investment restriction states
a maximum percentage of the Fund's assets, it is intended that if the percentage
limitation is met at the time the investment is made, a later change in
percentage resulting from changing total or net asset values will not be
considered a violation of such policy. However, in the event that the Fund's
asset coverage for borrowings falls below 300%, the Fund will take prompt action
to reduce its borrowings, as required by applicable law.

In order to comply with certain state "blue sky" restrictions, the Fund will
not as a matter of operating policy:

1. Purchase warrants if as a result the Fund would then have more than 5% of
its net assets (determined at the time of investment) invested in warrants.
Warrants will be valued at the lower of cost or market and investment in
warrants which are not listed on the New York Stock Exchange or American Stock
Exchange will be limited to 2% of the Fund's net assets (determined at the time
of investment). For the purpose of this limitation, warrants acquired in units
or attached to securities are deemed to be without value.

2. Purchase the securities of any one issuer if any officer or director of
the Fund or the Manager or Subadviser owns more than 1/2 of 1% of the
outstanding securities of such issuer, and such officers and directors who own
more than 1/2 of 1% own in the aggregate more than 5% of the outstanding
securities of such issuer.

3. Invest in securities of companies having a record, together with
predecessors, of less than three years of continuous operation, or securities of
issuers which are restricted as to disposition, if more than 15% of its total
assets would be invested in such securities. This restriction shall not apply to
mortgage-backed securities, asset-backed securities or obligations issued or
guaranteed by the U.S. Government, its agencies or instrumentalities.

DIRECTORS AND OFFICERS

<TABLE>
<S> <C> <C>
<FN>
- ------------------------
* "Interested" director, as defined in the Investment Company Act, by reason of his affiliation
with Prudential Securities or PMF.
</TABLE>

B-8
<PAGE>

<TABLE>
<CAPTION>
POSITION PRINCIPAL OCCUPATIONS
NAME, ADDRESS AND AGE WITH FUND DURING PAST FIVE YEARS
- --------------------------- ----------------------- -----------------------------------------------------------------
<S> <C> <C>
*Lawrence C. McQuade President and Vice Chairman of PMF (since 1988); Managing
(67) Director Director, Investment Banking, Prudential Securities
One Seaport Plaza (1988-1991); Director of Czech & Slovak American
New York, NY Enterprise Fund (since October 1994), Quixote
Corporation (since February 1992), BUNZL, P.L.C.
(since June 1991); formerly Director of Crazy Eddie
Inc. (1987-1990) and Kaiser Tech., Ltd. and Kaiser
Aluminum and Chemical Corp. (March 1987-November
1988); formerly Executive Vice President and
Director of WR Grace & Company; President and
Director of The High Yield Income Fund, Inc., The
Global Government Plus Fund, Inc. and The Global
Total Return Fund, Inc.
Stephen P. Munn (52) Director Chairman (since January 1994), Director and
101 South Salina President (since 1988) and Chief Executive Officer
Street (1988-December 1993) of Carlisle Companies
Syracuse, NY Incorporated.
*Richard A. Redeker Director President, Chief Executive Officer and Director
(51) (since October 1993), PMF; Executive Vice
One Seaport Plaza President, Director and Member of the Operating
New York, NY Committee (since October 1993), Prudential
Securities; Director (since October 1993) of
Prudential Securities Group, Inc.; Executive Vice
President, The Prudential Investment Corporation
(since July 1994); formerly Senior Executive Vice
President and Director of Kemper Financial
Services, Inc. (September 1978-September 1993);
Director of The Global Government Plus Fund, Inc.,
The Global Total Return Fund, Inc. and The High
Yield Income Fund, Inc.
Louis A. Weil, III Director Publisher and Chief Executive Officer, Phoenix
(53) Newspapers, Inc. (since August 1991); Director of
120 East Van Buren Central Newspapers, Inc. (since September 1991);
Phoenix, AZ prior thereto, Publisher of Time Magazine (May
1989-March 1991); formerly, President, Publisher
and Chief Executive Officer, The Detroit News
(February
1986-August 1989); formerly member of the Advisory
Board, Chase Manhattan Bank-Westchester; Director
of The Global Government Plus Fund,Inc.
David W. Drasnin (58) Vice President Vice President and Branch Manager of Prudential
39 Public Square Suite Securities.
500
Wilkes-Barre, PA
Robert F. Gunia (48) Vice President Chief Administrative Officer (since July 1990),
One Seaport Plaza Director (since January 1989), Executive Vice
New York, NY President, Treasurer and Chief Financial Officer
(since June 1987) of PMF; Senior Vice President
(since March 1987) of Prudential Securities; Vice
President and Director of The Asia Pacific Fund,
Inc. (since May 1989).
Susan C. Cote (40) Treasurer Senior Vice President of PMF; Senior Vice President
One Seaport Plaza (since
New York, NY January 1992) and Vice President (January
1986-December 1991) of Prudential Securities.

<FN>
- ------------
* "Interested" director, as defined in the Investment Company Act, by reason of
his affiliation with Prudential Securities or PMF.
</TABLE>

B-9
<PAGE>

Directors and officers of the Fund are also trustees, directors and officers
of some or all of the other investment companies distributed by Prudential
Securities or Prudential Mutual Fund Distributors, Inc. (PMFD).

The officers conduct and supervise the daily business operations of the
Fund, while the Directors, in addition to their functions set forth under
"Manager" and "Distributor," review such actions and decide on general policy.

The Fund pays each of its Directors who is not an affiliated person of PMF
annual compensation of $6,000, in addition to certain out-of-pocket expenses.
The Chairman of the Audit Committee receives an additional $200 per year.

Directors may receive their Director's fees pursuant to a deferred fee
agreement with the Fund. Under the terms of the agreement, the Fund accrues
daily the amount of such Director's fee which accrue interest at a rate
equivalent to the prevailing rate applicable to 90-day U.S. Treasury Bills at
the beginning of each calendar quarter or, pursuant to an SEC exemptive order,
at the daily rate of return of the Fund (the Fund rate). Payment of the interest
so accrued is also deferred and accruals become payable at the option of the
Director. The Fund's obligation to make payments of deferred Director's fees,
together with interest thereon, is a general obligation of the Fund.

Pursuant to the terms of the Management Agreement with the Fund, the Manager
pays all compensation of officers and employees of the Fund as well as the fees
and expenses of all Directors of the Fund who are affiliated persons of the
Manager.

The following table sets forth the aggregate compensation paid by the Fund
for the fiscal year ended September 30, 1994 to the Directors who are not
affiliated with the Manager and the aggregate compensation paid to such
Directors for service on the Fund's board and that of all other funds managed by
Prudential Mutual Fund Management, Inc. (Fund Complex) for the calendar year
ended December 31, 1994.

COMPENSATION TABLE

<TABLE>
<CAPTION>
TOTAL
PENSION OR COMPENSATION
RETIREMENT FROM FUND
AGGREGATE BENEFITS ACCRUED ESTIMATED ANNUAL AND FUND
COMPENSATION AS PART OF TRUST BENEFITS UPON COMPLEX PAID
NAME AND POSITION FROM FUND EXPENSES RETIREMENT TO TRUSTEES
- -------------------------------------------------------- ------------- ----------------- ------------------- --------------
<S> <C> <C> <C> <C>
Delayne Dedrick Gold -- Director $ 6,200 None N/A $ 185,000(24)*
Arthur Hauspurg -- Director $ 6,000 None N/A $ 37,500(5)*
Stephen P. Munn -- Director $ 6,000 None N/A $ 42,500(6)*
Louis A. Weil, Ill -- Director $ 6,000 None N/A $ 97,500(12)*
</TABLE>

- ------------------------
*Indicates number of funds in Fund Complex (including the Fund) to which
aggregate compensation relates.

As of November 4, 1994, the Directors and officers of the Fund, as a group,
owned less than 1% of the outstanding common stock of the Fund.

B-10
<PAGE>
As of November 4, 1994, the beneficial owners, directly or indirectly, of
more than 5% of the outstanding shares of any class of beneficial interest were:
Franco M. Navazio, 25 Taffrail Way, Mashpee, MA, who held 8,162 Class C shares
(23.6%), Steven Temkin, 144 Chestnut Hill Road, Torrington, CT, who held 2,102
Class C shares (6.0%), Theresa Schaffer, 300 Durso Drive, Newark, DE, who held
2,525 Class C shares (7.3%) and Gladys E. Mellin, 2300 Lexington Avenue S,
Mendota Heights, MN, who held 2,053 Class C shares (5.9%).

As of November 4, 1994, Prudential Securities was the record holder for
other beneficial owners of 2,264,789 Class A shares (or 28% of the outstanding
Class A shares), 24,461,328 Class B shares (or 71% of the outstanding Class B
shares) and 31,529 Class C shares (or 91% of the outstanding Class C shares) of
the Fund. In the event of any meetings of shareholders, Prudential Securities
will forward, or cause the forwarding of, proxy materials to the beneficial
owners for which it is the record holder.

MANAGER

The manager of the Fund is Prudential Mutual Fund Management, Inc. (PMF or
the Manager), One Seaport Plaza, New York, New York 10292. PMF serves as manager
to all of the other open-end management investment companies that, together with
the Fund, comprise the Prudential Mutual Funds. See "How the Fund Is
Managed--Manager" in the Prospectus. As of December 31, 1994, PMF managed and/or
administered open-end and closed-end management investment companies with assets
of approximately $47 billion. According to the Investment Company Institute, as
of April 30, 1994, the Prudential Mutual Funds were the 12th largest family of
mutual funds in the United States.

Pursuant to the Management Agreement with the Fund (the Management
Agreement), PMF, subject to the supervision of the Fund's Board of Directors and
in conformity with the stated policies of the Fund, manages both the investment
operations of the Fund and the composition of the Fund's portfolio, including
the purchase, retention, disposition and loan of securities. In connection
therewith, PMF is obligated to keep certain books and records of the Fund. PMF
also administers the Fund's corporate affairs and, in connection therewith,
furnishes the Fund with office facilities, together with those ordinary clerical
and bookkeeping services which are not being furnished by State Street Bank and
Trust Company, the Fund's custodian, and Prudential Mutual Fund Services, Inc.
(PMFS or the Transfer Agent), the Fund's transfer and dividend disbursing agent.
The management services of PMF for the Fund are not exclusive under the terms of
the Management Agreement and PMF is free to, and does, render management
services to others.

For its services, PMF receives, pursuant to the Management Agreement, a fee
at an annual rate of .70 of 1% of the Fund's average daily net assets. The fee
is computed daily and payable monthly. The Management Agreement also provides
that, in the event the expenses of the Fund (including the fees of PMF, but
excluding interest, taxes, brokerage commissions, distribution fees and
litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's business) for any fiscal year
exceed the lowest applicable annual expense limitation established and enforced
pursuant to the statutes or regulations of any jurisdiction in which the Fund's
shares are qualified for offer and sale, the compensation due to PMF will be
reduced by the amount of such excess. Reductions in excess of the total
compensation payable to PMF will be paid by PMF to the Fund. No such reductions
were required during the fiscal year ended September 30, 1994. Currently, the
Fund believes that the most restrictive expense limitation of state securities
commissions is 2 1/2% of the Fund's average daily net assets up to $30 million,
2% of the next $70 million of such assets and 1 1/2% of such assets in excess of
$100 million.

In connection with its management of the corporate affairs of the Fund, PMF
bears the following expenses:

(a) the salaries and expenses of all of its and the Fund's personnel except
the fees and expenses of Directors who are not affiliated persons of PMF or the
Fund's investment adviser;

(b) all expenses incurred by PMF or by the Fund in connection with managing
the ordinary course of the Fund's business, other than those assumed by the Fund
as described below; and

(c) the costs and expenses payable to The Prudential Investment Corporation
(PIC) pursuant to the subadvisory agreement between PMF and PIC (the Subadvisory
Agreement).

Under the terms of the Management Agreement, the Fund is responsible for the
payment of the following expenses: (a) the fees payable to the Manager, (b) the
fees and expenses of Directors who are not affiliated persons of the Manager or
the Fund's investment adviser, (c) the fees and certain expenses of the
Custodian and Transfer and Dividend Disbursing Agent, including the cost of
providing records to the Manager in connection with its obligation of
maintaining required records of the Fund and of

B-11
<PAGE>
pricing the Fund's shares, (d) the charges and expenses of legal counsel and
independent accountants for the Fund, (e) brokerage commissions and any issue or
transfer taxes chargeable to the Fund in connection with its securities
transactions, (f) all taxes and corporate fees payable by the Fund to
governmental agencies, (g) the fees of any trade associations of which the Fund
may be a member, (h) the cost of stock certificates representing shares of the
Fund, (i) the cost of fidelity and liability insurance, (j) the fees and
expenses involved in registering and maintaining registration of the Fund and of
its shares with the Securities and Exchange Commission, registering the Fund and
qualifying its shares under state securities laws, including the preparation and
printing of the Fund's registration statements and prospectuses for such
purposes, (k) allocable communications expenses with respect to investor
services and all expenses of shareholders' and Directors' meetings and of
preparing, printing and mailing reports, proxy statements and prospectuses to
shareholders in the amount necessary for distribution to the shareholders, (l)
litigation and indemnification expenses and other extraordinary expenses not
incurred in the ordinary course of the Fund's business, and (m) distribution
fees.

The Management Agreement provides that PMF will not be liable for any error
of judgment or for any loss suffered by the Fund in connection with the matters
to which the Management Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Management Agreement provides that it will terminate automatically if assigned,
and that it may be terminated without penalty by either party upon not more than
60 days' nor less than 30 days' written notice. The Management Agreement will
continue in effect for a period of more than two years from the date of
execution only so long as such continuance is specifically approved at least
annually inconformity with the Investment Company Act. The Management Agreement
was last approved by the Board of Directors of the Fund, including a majority of
the Directors who are not parties to the contract or interested persons of any
such party as defined in the Investment Company Act on May 2, 1994 and by
shareholders of the Fund on April 28, 1988.

For the fiscal years ended September 30, 1994, 1993 and 1992, the Fund paid
management fees to PMF of $3,484,730, $2,439,222, and $1,334,281 respectively.

PMF has entered into the Subadvisory Agreement with PIC (the Subadviser).
The Subadvisory Agreement provides that PIC will furnish investment advisory
services in connection with the management of the Fund. In connection therewith,
PIC is obligated to keep certain books and records of the Fund. PMF continues to
have responsibility for all investment advisory services pursuant to the
Management Agreement and supervises PIC's performance of such services. PIC is
reimbursed by PMF for the reasonable costs and expenses incurred by PIC in
furnishing those services.

The Subadvisory Agreement was last approved by the Board of Directors,
including a majority of the Directors who are not parties to the contract or
interested persons of any such party as defined in the Investment Company Act,
on May 2, 1994, and by shareholders of the Fund on April 28, 1988.

The Subadvisory Agreement provides that it will terminate in the event of
its assignment (as defined in the Investment Company Act) or upon the
termination of the Management Agreement. The Subadvisory Agreement may be
terminated by the Fund, PMF or PIC upon not more than 60 days', nor less than 30
days', written notice. The Subadvisory Agreement provides that it will continue
in effect for a period of more than two years from its execution only so long as
such continuance is specifically approved at least annually in accordance with
the requirements of the Investment Company Act.

The Manager and the Subadviser are subsidiaries of The Prudential Insurance
Company of America (Prudential) which, as of December 31, 1993, was one of the
largest financial institutions in the world and the largest insurance company in
North America. Prudential has been engaged in the insurance business since 1875.
In July 1994, INSTITUTIONAL INVESTOR ranked Prudential the second largest
institutional money manager of the 300 largest money management organizations in
the United States as of December 31, 1993.

DISTRIBUTOR

Prudential Mutual Fund Distributors, Inc. (PMFD), One Seaport Plaza, New
York, New York 10292, acts as the distributor of the Class A shares of the Fund.
Prudential Securities Incorporated, One Seaport Plaza, New York, New York 10292
(Prudential Securities or PSI), acts as the distributor of the Class B and Class
C shares of the Fund.

Pursuant to separate Distribution and Service Plans (the Class A Plan, the
Class B Plan and the Class C Plan, collectively, the Plans) adopted by the Fund
under Rule 12b-1 under the Investment Company Act and separate distribution
agreements (the Distribution Agreements), PMFD and Prudential Securities
(collectively, the Distributor) incur the expenses of distributing the Fund's
Class A, Class B and Class C shares. See "How the Fund is Managed--Distributor"
in the Prospectus.

B-12
<PAGE>
Prior to January 22, 1990, the Fund offered only one class of shares (the
then existing Class B shares). On October 6, 1989, the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Class A or Class B Plan or in any agreement related to either Plan (the Rule
12b-1 Directors), at a meeting called for the purpose of voting on each Plan,
adopted a new plan of distribution for the Class A shares of the Fund (the Class
A Plan) and approved an amended and restated plan of distribution with respect
to the Class B shares of the Fund (the Class B Plan). On February 8, 1993, the
Board of Directors, including a majority of the Rule 12b-1 Directors, at a
meeting called for the purpose of voting on each Plan, approved modifications to
the Fund's Class A and Class B Plans and Distribution Agreements to conform them
to recent amendments to the National Association of Securities Dealers, Inc.
(NASD) maximum sales charge rule described below. As so modified, the Class A
Plan provides that (i) up to .25 of 1% of the average daily net assets of the
Class A shares may be used to pay for personal service and the maintenance of
shareholder accounts (service fee) and (ii) total distribution fees (including
the service fee of .25 of 1%) may not exceed .30 of 1%. As so modified, the
Class B Plan provides that (i) up to .25 of 1% of the average daily net assets
of the Class B shares may be paid as a service fee and (ii) up to.75 of 1% (not
including the service fee) of the average daily net assets of the Class B shares
(asset-based sales charge) may be used as reimbursement for distribution-related
expenses with respect to the Class B shares. On May 3, 1993, the Board of
Directors, including a majority of the Rule 12b-1 Directors, at a meeting called
for the purpose of voting on each Plan, adopted a plan of distribution for the
Class C shares of the Fund and approved further amendments to the plans of
distribution for the Fund's Class A and Class B shares changing them from
reimbursement type plans to compensation type plans. The Plans were last
approved by the Board of Directors, including a majority of the Rule 12b-1
Directors, on May 2, 1994. The Class A Plan, as amended, was approved by Class A
and Class B shareholders, and the Class B Plan, as amended, was approved by
Class B shareholders on July 19, 1994. The Class C Plan was approved by the sole
shareholder of Class C shares on August 1, 1994.

CLASS A PLAN. For the fiscal year ended September 30, 1994 PMFD received
payments of $229,425 under the Class A Plan. This amount was primarily expended
for payment of account servicing fees to financial advisers and other persons
who sell Class A shares. For the fiscal year ended September 30, 1994, PMFD also
received approximately $498,400 in initial sales charges.

CLASS B PLAN. For the fiscal year ended September 30, 1994, Prudential
Securities received $4,002,398 from the Fund under the Class B Plan and spent
approximately $3,255,400 in distributing the Fund's Class B shares. It is
estimated that of the latter amount, approximately $108,200 (3.3%) was spent on
printing and mailing of prospectuses to other than current shareholders;
$150,400 (4.6%) on interest and/or carrying costs; $657,700 (20.2%) on
compensation to Pruco Securities Corporation, an affiliated broker-dealer, for
commissions to its representatives and other expenses, including an allocation
on account of overhead and other branch office distribution-related expenses,
incurred by it for distribution of Fund shares; and $2,339,100 (71.9%) on the
aggregate of (i) payments of commissions and account servicing fees to financial
advisers ($1,326,500 or 40.8%) and (ii) an allocation on account of overhead and
other branch office distribution-related expenses ($1,012,600 or 31.1%). The
term "overhead and other branch office distribution-related expenses" represents
(a) the expenses of operating Prudential Securities' branch offices in
connection with the sale of Fund shares, including lease costs, the salaries and
employee benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies, (b) the costs of
client sales seminars, (c) expenses of mutual fund sales coordinators to promote
the sale of Fund shares; and (d) other incidental expenses relating to branch
promotion of Fund shares.

Prudential Securities also receives the proceeds of contingent deferred
sales charges paid by investors upon certain redemptions of Class B shares. See
"Shareholder Guide--How to Sell Your Shares--Contingent Deferred Sales Charges"
in the Prospectus. For the fiscal year ended September 30, 1994, Prudential
Securities received approximately $796,400 in contingent deferred sales charges.

CLASS C PLAN. For the period August 1, 1994 (inception of Class C shares)
through September 30, 1994, Prudential Securities received $292 under the Class
C Plan and spent approximately $2,800 in distributing Class C shares. Prudential
Securities also receives the proceeds of contingent deferred sales charges paid
by investors upon certain redemptions of Class C shares. See "Shareholder
Guide--How to Sell Your Shares--Contingent Deferred Sales Charges" in the
Prospectus. For the period August 1, 1994 (inception of Class C shares) through
September 30, 1994, Prudential Securities did not receive any contingent
deferred sales charges.

The Class A, Class B and Class C Plans continue in effect from year to year,
provided that each such continuance is approved at least annually by a vote of
the Board of Directors, including a majority vote of the Rule 12b-1 Directors,
cast in person at a meeting called for the purpose of voting on such
continuance. The Plans may each be terminated at any time, without penalty, by
the vote of a majority of the Rule 12b-1 Directors or by the vote of the holders
of a majority of the outstanding shares

B-13
<PAGE>
of the applicable class on not more than 30 days' written notice to any other
party to the Plans. The Plans may not be amended to increase materially the
amounts to be spent for the services described therein without approval by the
shareholders of the applicable class (by both Class A and Class B shareholders,
voting separately, in the case of material amendments to the Class A Plan), and
all material amendments are required to be approved by the Board of Directors in
the manner described above. Each Plan will automatically terminate in the event
of its assignment. The Fund will not be contractually obligated to pay expenses
incurred under any Plan if it is terminated or not continued.

Pursuant to each Plan, the Board of Directors will review at least quarterly
a written report of the distribution expenses incurred on behalf of each class
of shares of the Fund by the Distributor. The report will include an itemization
of the distribution expenses and the purposes of such expenditures. In addition,
as long as the Plans remain in effect, the selection and nomination of the Rule
12b-1 Directors shall be committed to the Rule 12b-1 Directors.

Pursuant to each Distribution Agreement, the Fund has agreed to indemnify
PMFD and Prudential Securities to the extent permitted by applicable law against
certain liabilities under the Securities Act of 1933, as amended. Each
Distribution Agreement was last approved by the Board of Directors, including a
majority of the Rule 12b-1 Directors, on May 2, 1994.

NASD MAXIMUM SALES CHARGE RULE. Pursuant to rules of the NASD, the
Distributor is required to limit aggregate initial sales charges, deferred sales
charges and asset-based sales charges to 6.25% of total gross sales of each
class of shares. Interest charges on unreimbursed distribution expenses equal to
the prime rate plus one percent per annum may be added to the 6.25% limitation.
Sales from the reinvestment of dividends and distributions are not included in
the calculation of the 6.25% limitation. The annual asset-based sales charge on
shares of the Fund may not exceed .75 of 1% per class. The 6.25% limitation
applies to the Fund rather than on a per shareholder basis. If aggregate sales
charges were to exceed 6.25% of total gross sales of any class, all sales
charges on shares of that class would be suspended.

On October 21, 1993, PSI entered into an omnibus settlement with the SEC,
state securities regulators in 51 jurisdictions and the NASD to resolve
allegations that PSI sold interests in more than 700 limited partnerships (and a
limited number of other types of securities) from January 1, 1980 through
December 31, 1990, in violation of securities laws to persons for whom such
securities were not suitable in light of the individuals' financial condition or
investment objectives. It was also alleged that the safety, potential returns
and liquidity of the investments had been misrepresented. The limited
partnerships principally involved real estate, oil and gas producing properties
and aircraft leasing ventures. The SEC Order (i) included findings that PSI's
conduct violated the federal securities laws and that an order issued by the SEC
in 1986 requiring PSI to adopt, implement and maintain certain supervisory
procedures had not been complied with; (ii) directed PSI to cease and desist
from violating the federal securities laws and imposed a $10 million civil
penalty; and (iii) required PSI to adopt certain remedial measures including the
establishment of a Compliance Committee of its Board of Directors. Pursuant to
the terms of the SEC settlement, PSI established a settlement fund in the amount
of $330,000,000 and procedures, overseen by a court approved Claims
Administrator, to resolve legitimate claims for compensatory damages by
purchasers of the partnership interests. PSI has agreed to provide additional
funds, if necessary, for that purpose. PSI's settlement with the state
securities regulators included an agreement to pay a penalty of $500,000 per
jurisdiction. PSI consented to a censure and to the payment of a $5,000,000 fine
in settling the NASD action. In settling the above referenced matters, PSI
neither admitted nor denied the allegations asserted against it.

On January 18, 1994, PSI agreed to the entry of a Final Consent Order and a
Parallel Consent Order by the Texas Securities Commissioner. The firm also
entered into a related agreement with the Texas Securities Commissioner. The
allegations were that the firm had engaged in improper sales practices and other
improper conduct resulting in pecuniary losses and other harm to investors
residing in Texas with respect to purchases and sales of limited partnership
interests during the period of January 1, 1980 through December 31, 1990.
Without admitting or denying the allegations, PSI consented to a reprimand,
agreed to cease and desist from future violations, and to provide voluntary
donations to the State of Texas in the aggregate amount of $1,500,000. The firm
agreed to suspend the creation of new customer accounts, the general
solicitation of new accounts, and the offer for sale of securities in or from
PSI's North Dallas office to new customers during a period of twenty consecutive
business days, and agreed that its other Texas offices would be subject to the
same restrictions for a period of five consecutive business days. PSI also
agreed to institute training programs for its securities salesmen in Texas.

On October 27, 1994, Prudential Securities Group, Inc. and PSI entered into
agreements with the United States Attorney deferring prosecution (provided PSI
complies with the terms of the agreement for three years) for any alleged
criminal activity related to the sale of certain limited partnership programs
from 1983 to 1990. In connection with these agreements, PSI agreed to add the
sum of $330,000,000 to the Fund established by the SEC and executed a
stipulation providing for a reversion of such funds to the United States Postal
Inspection Service. PSI further agreed to obtain a mutually acceptable outside
director to sit on the Board of Directors of PSG and the Compliance Committee of
PSI. The new director will also serve as an independent

B-14
<PAGE>
"ombudsman" whom PSI employees can call anonymously with complaints about ethics
and compliance. Prudential Securities shall report any allegations or instances
of criminal conduct and material improprieties to the new director. The new
director will submit compliance reports which shall identify all such
allegations or instances of criminal conduct and material improprieties every
three months for a three-year period.

PORTFOLIO TRANSACTIONS AND BROKERAGE

The Manager is responsible for decisions to buy and sell securities, options
on securities and futures contracts for the Fund, the selection of brokers,
dealers and futures commission merchants to effect the transactions and the
negotiation of brokerage commissions, if any. For purposes of this section, the
term "Manager" includes the "Subadviser." Purchases and sales of securities or
futures contracts on a securities exchange or board of trade are effected
through brokers or futures commission merchants who charge a commission for
their services. Orders may be directed to any broker or futures commission
merchant, including, to the extent and in the manner permitted by applicable
law, Prudential Securities and its affiliates. Brokerage commissions on United
States securities, options and futures exchanges or boards of trade are subject
to negotiation between the Manager and the broker or futures commission
merchant.

In the over-the-counter market, securities are generally traded on a "net"
basis with dealers acting as principal for their own accounts without a stated
commission, although the price of the security usually includes a profit to the
dealer. In underwritten offerings, securities are purchased at a fixed price
which includes an amount of compensation to the underwriter, generally referred
to as the underwriter's concession or discount. On occasion, certain money
market instruments may be purchased directly from an issuer, in which case no
commissions or discounts are paid. The Fund will not deal with Prudential
Securities in any transaction in which Prudential Securities acts as principal.
Thus it will not deal in over-the-counter securities with Prudential Securities
acting as market maker, and it will not execute a negotiated trade with
Prudential Securities if execution involves Prudential Securities acting as
principal with respect to any part of the Fund's order. In placing orders for
portfolio securities or futures contracts of the Fund, the Manager is required
to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, the Manager will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of the Fund, the Manager or the Manager's other clients. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by the
Manager in connection with all of its investment activities, and some of such
services obtained in connection with the execution of transactions for the Fund
may be used in managing other investment accounts. Conversely, brokers, dealers
or futures commission merchants furnishing such services may be selected for the
execution of transactions of such other accounts, whose aggregate assets are far
larger than the Fund, and the services furnished by such brokers, dealers or
futures commission merchants may be used by the Manager in providing investment
management for the Fund. Commission rates are established pursuant to
negotiations with the broker, dealer or futures commission merchant based on the
quality and quantity of execution services provided by the broker, dealer or
futures commission merchant in the light of generally prevailing rates. The
Manager's policy is to pay higher commissions to brokers, other than Prudential
Securities, for particular transactions than might be charged if a different
broker had been selected, on occasions when, in the Manager's opinion, this
policy furthers the objective of obtaining best price and execution. In
addition, the Manager is authorized to pay higher commissions on brokerage
transactions for the Fund to brokers, dealers or futures commission merchants
other than Prudential Securities in order to secure research and investment
services described above, subject to review by the Fund's Board of Directors
from time to time as to the extent and continuation of this practice. The
allocation of orders among brokers, dealers and futures commission merchants and
the commission rates paid are reviewed periodically by the Fund's Board of
Directors. Portfolio securities may not be purchased from any underwriting or
selling syndicate of which Prudential Securities (or any affiliate), during the
existence of the syndicate, is a principal underwriter (as defined in the
Investment Company Act), except in accordance with rules of the SEC. This
limitation, in the opinion of the Fund, will not significantly affect the Fund's
ability to pursue its present investment objective. However, in the future in
other circumstances, the Fund may be at a disadvantage because of this
limitation in comparison to other funds with similar objectives but not subject
to such limitations.

Subject to the above considerations, the Manager may use Prudential
Securities as a broker or futures commission merchant for the Fund. In order for
Prudential Securities (or any affiliate) to effect any portfolio transactions
for the Fund, the commissions, fees or other remuneration received by Prudential
Securities (or any affiliate) must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers or futures
commission merchants in connection with comparable transactions involving
similar securities or futures being purchased or sold on a securities or
commodities exchange during a comparable period of time. This standard would
allow Prudential Securities (or any affiliate) to receive no more than the
remuneration which would be expected to be received by an unaffiliated broker or
futures commission merchant in

B-15
<PAGE>
a commensurate arm's-length transaction. Furthermore, the Board of Directors of
the Fund, including a majority of the noninterested Directors, has adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to Prudential Securities (or any affiliate) are
consistent with the foregoing standard. In accordance with Section 11(a) of the
Securities Exchange Act of 1934, Prudential Securities may not retain
compensation for effecting transactions on a national securities exchange for
the Fund unless the Fund has expressly authorized the retention of such
compensation. Prudential Securities must furnish to the Fund at least annually a
statement setting forth the total amount of all compensation retained by
Prudential Securities from transactions effected for the Fund during the
applicable period. Brokerage and futures transactions with Prudential Securities
(or any affiliate) are also subject to such fiduciary standards as may be
imposed upon Prudential Securities (or such affiliate) by applicable law.

Transactions in options by the Fund will be subject to limitations
established by each of the exchanges governing the maximum number of options
which may be written or held by a single investor or group of investors acting
in concert, regardless of whether the options are written or held on the same or
different exchanges or are written or held in one or more accounts or through
one or more brokers. Thus, the number of options which the Fund may write or
hold may be affected by options written or held by the Manager and other
investment advisory clients of the Manager. An exchange may order the
liquidation of positions found to be in excess of these limits, and it may
impose certain other sanctions.

The table presented below shows certain information regarding the payment of
commissions by the Fund, including the amount of such commissions paid to
Prudential Securities for the three-year period ended September 30, 1994.

<TABLE>
<CAPTION>
FISCAL YEAR ENDED SEPTEMBER 30,
1994 1993 1992
-------- -------- --------
<S> <C> <C> <C>
Total brokerage commissions paid by the
Fund................................... 1,222,849 $889,308 $641,051
Total brokerage commissions paid to
Prudential Securities.................. 11,325 $ 10,875 $ 18,268
Percentage of total brokerage
commissions paid to Prudential
Securities............................. .93% 1.22% 2.85%
</TABLE>

The Fund effected approximately .67% of the total dollar amounts of its
transactions involving the payment of commissions through Prudential Securities
during the fiscal year ended September 30, 1994. Of the total brokerage
commissions paid by the Fund for the fiscal year ended September 30, 1994,
$832,619 (68% of gross brokerage transactions) was paid to firms which provided
research, statistical or other services provided to PMF. PMF has not separately
identified a portion of such brokerage commissions as applicable to the
provision of such research, statistical or other service.

PURCHASE AND REDEMPTION OF FUND SHARES

Each class of shares represents an interest in the same portfolio of
investments of the Fund and has the same rights, except that (i) each class
bears the separate expenses of its Rule 12b-1 distribution and service plan,
(ii) each class has exclusive voting rights with respect to its plan (except
that the Fund has agreed with the SEC in connection with the offering of a
conversion feature on Class B shares to submit any amendment of the Class A
distribution and service plan to both Class A and Class B shareholders) and
(iii) only Class B shares have a conversion feature. See "Distributor." Each
class also has separate exchange privileges. See "Shareholder Investment
Account--Exchange Privilege."

SPECIMEN PRICE MAKE-UP

Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales charge of 5% and Class
B* and Class C* shares are sold at net asset value. Using the Fund's net asset
value at September 30, 1994, the maximum offering price of the Fund's shares is
as follows:

<TABLE>
<S> <C>
CLASS A
Net asset value and redemption price per Class A share.................. $ 12.40
Maximum sales charge (5% of offering price)............................. .65
---------
Offering price to public................................................ $ 13.05
---------
---------
CLASS B
Net asset value, offering price and redemption price per Class B
share*................................................................. $ 11.99
---------
---------
CLASS C
Net asset value, offering price and redemption price per Class C
share*................................................................. $ 11.99
---------
---------
<FN>

--------------------
* Class B and Class C shares are subject to a contingent deferred sales
charge on certain redemptions. See "Shareholder Guide--How to Sell Your
Shares--Contingent Deferred Sales Charges" in the Prospectus.
</TABLE>

B-16
<PAGE>
REDUCTION AND WAIVER OF INITIAL SALES CHARGES--CLASS A SHARES

COMBINED PURCHASE AND CUMULATIVE PURCHASE PRIVILEGE. If an investor or
eligible group of related investors purchases Class A shares of the Fund
concurrently with Class A shares of other Prudential Mutual Funds, the purchases
may be combined to take advantage of the reduced sales charges applicable to
larger purchases. See the table of breakpoints under "Shareholder
Guide--Alternative Purchase Plan" in the Prospectus.

An eligible group of related Fund investors includes any combination of the
following:

(a) an individual;

(b) the individual's spouse, their children and their parents;

(d) any company controlled by the individual (a person, entity or group that
holds 25% or more of the outstanding voting securities of a corporation will be
deemed to control the corporation, and a partnership will be deemed to be
controlled by each of its general partners);

(e) a trust created by the individual, the beneficiaries of which are the
individual, his or her spouse, parents or children;

(f) a Uniform Gifts to Minors Act/Uniform Transfers to Minors Act account
created by the individual or the individual's spouse; and

(g) one or more employee benefit plans of a company controlled by an
individual.

In addition, an eligible group of related Fund investors may include an
employer (or group of related employers) and one or more qualified retirement
plans of such employer or employers (an employer controlling, controlled by or
under common control with another employer is deemed related to that employer).

The Distributor must be notified at the time of purchase that the investor
is entitled to a reduced sales charge. The reduced sales charges will be granted
subject to confirmation of the investor's holdings. The Combined Purchase and
Cumulative Purchase Privilege does not apply to individual participants in any
retirement or group plans.

RIGHTS OF ACCUMULATION. Reduced sales charges are also available through
Rights of Accumulation, under which an investor or an eligible group of related
investors, as described above under "Combined Purchase and Cumulative Purchase
Privilege," may aggregate the value of their existing holdings of shares of the
Fund and shares of other Prudential Mutual Funds (excluding money market funds
other than those acquired pursuant to the exchange privilege) to determine the
reduced sales charge. However, the value of shares held directly with the
Transfer Agent and through Prudential Securities will not be aggregated to
determine the reduced sales charge. All shares must be held either directly with
the Transfer Agent or through Prudential Securities. The value of existing
holdings for purposes of determining the reduced sales charge is calculated
using the maximum offering price (net asset value plus maximum sales charge) as
of the previous business day. See "How the Fund Values its Shares" in the
Prospectus. The Distributor must be notified at the time of purchase that the
investor is entitled to a reduced sales charge. The reduced sales charges will
be granted subject to confirmation of the investor's holdings. Rights of
accumulation are not available to individual participants in any retirement or
group plans.

LETTERS OF INTENT. Reduced sales charges are also available to investors (or
an eligible group of related investors), including retirement and group plans,
who enter into a written Letter of Intent providing for the purchase, within a
thirteen-month period, of shares of the Fund and shares of other Prudential
Mutual Funds. All shares of the Fund and shares of other Prudential Mutual Funds
(excluding money market funds other than those acquired pursuant to the exchange
privilege) which were previously purchased and are still owned are also included
in determining the applicable reduction. However, the value of shares held
directly with the Transfer Agent and through Prudential Securities will not be
aggregated to determine the reduced sales charge. All shares must be held either
directly with the Transfer Agent or through Prudential Securities. The
Distributor must be notified at the time of purchase that the investor is
entitled to a reduced sales charge. The reduced sales charges will be granted
subject to confirmation of the investor's holdings. Letters of Intent are not
available to individual participants in any retirement or group plans.

A Letter of Intent permits a purchaser to establish a total investment goal
to be achieved by any number of investments over a thirteen-month period. Each
investment made during the period will receive the reduced sales charge
applicable to the amount represented by the goal, as if it were a single
investment. Escrowed Class A shares totaling 5% of the dollar amount of the
Letter

B-17
<PAGE>
of Intent will be held by the Transfer Agent in the name of the purchaser,
except in the case of retirement and group plans where the employer or plan
sponsor will be responsible for paying any applicable sales charge. The
effective date of a Letter of Intent may be back-dated up to 90 days, in order
that any investments made during this 90-day period, valued at the purchaser's
cost, can be applied to the fulfillment of the Letter of Intent goal, except in
the case of retirement and group plans.

The Letter of Intent does not obligate the investor to purchase, nor the
Fund to sell, the indicated amount. In the event the Letter of Intent goal is
not achieved within the thirteen-month period, the purchaser (or the employer or
plan sponsor in the case of any retirement or group plan) is required to pay the
difference between the sales charge otherwise applicable to the purchases made
during this period and sales charges actually paid. Such payment may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain such difference. Investors electing to
purchase Class A shares of the Fund pursuant to a Letter of Intent should
carefully read such Letter of Intent.

WAIVER OF THE CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES

The Contingent Deferred Sales Charge is waived under circumstances described
in the Prospectus. See "Shareholder Guide--How to Sell Your Shares--Waiver of
Contingent Deferred Sales Charges--Class B Shares" in the Prospectus. In
connection with these waivers, the Transfer Agent will require you to submit the
supporting documentation set forth below.

<TABLE>
<CAPTION>
CATEGORY OF WAIVER REQUIRED DOCUMENTATION
<S> <C>
Death A copy of the shareholder's death certificate or,
in the case of a trust, a copy of the grantor's
death certificate, plus a copy of the trust
agreement identifying the grantor.

Disability - An individual will be A copy of the Social Security Administration award
considered disabled if he or she is letter or a letter from a physician on the
unable to engage in any substantial physician's letterhead stating that the shareholder
gainful activity by reason of any (or, in the case of a trust, the grantor) is
medically determinable physical or permanently disabled. The letter must also indicate
mental impairment which can be expected the date of disability.
to result in death or to be of
long-continued and indefinite duration.

Distribution from an IRA or 403(b) A copy of the distribution form from the custodial
Custodial Account firm indicating (i) the date of birth of the
shareholder and (ii) that the shareholder is over
age 59 1/2 and is taking a normal
distribution--signed by the shareholder.

Distribution from Retirement Plan A letter signed by the plan administrator/trustee
indicating the reason for the distribution.

Excess Contributions A letter from the shareholder (for an IRA) or the
plan administrator/ trustee on company letterhead
indicating the amount of the excess and whether or
not taxes have been paid.
</TABLE>

The Transfer Agent reserves the right to request such additional documents
as it may deem appropriate.

QUANTITY DISCOUNT--CLASS B SHARES PURCHASED PRIOR TO AUGUST 1, 1994

The CDSC is reduced on redemptions of Class B shares of the Fund purchased
prior to August 1, 1994 if immediately after a purchase of such shares, the
aggregate cost of all Class B shares of the Fund owned by you in a single
account exceeded

B-18
<PAGE>
$500,000. For example, if you purchased $100,000 of Class B shares of the Fund
and the following year purchase an additional $450,000 of Class B shares with
the result that the aggregate cost of your Class B shares of the Fund following
the second purchase was $550,000, the quantity discount would be available for
the second purchase of $450,000 but not for the first purchase of $100,000. The
quantity discount will be imposed at the following rates depending on whether
the aggregate value exceeded $500,000 or $1 million:

<TABLE>
<CAPTION>
CONTINGENT DEFERRED SALES CHARGE
AS A PERCENTAGE OF DOLLARS INVESTED
OR REDEMPTION PROCEEDS
YEAR SINCE PURCHASE ------------------------------------------
PAYMENT MADE $500,001 TO $1 MILLION OVER $1 MILLION
- ------------------------- ----------------------- ----------------
<S> <C> <C>
First.................... 3.0% 2.0%
Second................... 2.0% 1.0%
Third.................... 1.0% 0%
Fourth and thereafter.... 0% 0%
</TABLE>

You must notify the Fund's Transfer Agent either directly or through
Prudential Securities or Prusec, at the time of redemption, that you are
entitled to the reduced CDSC. The reduced CDSC will be granted subject to
confirmation of your holdings.

SHAREHOLDER INVESTMENT ACCOUNT

Upon the initial purchase of Fund shares, a Shareholder Investment Account
is established for each investor under which the shares are held for the
investor by the Transfer Agent. If a stock certificate is desired, it must be
requested in writing for each transaction. Certificates are issued only for full
shares and may be redeposited in the Account at any time. There is no charge to
the investor for issuance of a certificate. The Fund makes available to the
shareholders the following privileges and plans.

AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR DISTRIBUTIONS

For the convenience of investors, all dividends and distributions are
automatically reinvested in full and fractional shares of the Fund. An investor
may direct the Transfer Agent in writing not less than 5 full business days
prior to the record date to have subsequent dividends and/or distributions sent
in cash rather than reinvested. In the case of recently purchased shares for
which registration instructions have not been received on the record date, cash
payment will be made directly to the dealer. Any shareholder who receives a cash
payment representing a dividend or distribution may reinvest such distribution
at net asset value by returning the check or the proceeds to the Transfer Agent
within 30 days after the payment date. Such investment will be made at the net
asset value per share next determined after receipt of the check or proceeds by
the Transfer Agent. Such shareholder will receive credit for any contingent
deferred sales charge paid in connection with the amount of proceeds being
reinvested.

EXCHANGE PRIVILEGE

The Fund makes available to its shareholders the privilege of exchanging
their shares of the Fund for shares of certain other Prudential Mutual Funds,
including one or more specified money market funds, subject in each case to the
minimum investment requirements of such funds. Shares of such other Prudential
Mutual Funds may also be exchanged for shares of the Fund. All exchanges are
made on the basis of relative net asset value next determined after receipt of
an order in proper form. An exchange will be treated as a redemption and
purchase for tax purposes. Shares may be exchanged for shares of another fund
only if shares of such fund may legally be sold under applicable state laws. For
retirement and group plans having a limited menu of Prudential Mutual Funds, the
Exchange Privilege is available for those funds eligible for investment in the
particular program.

It is contemplated that the exchange privilege may be applicable to new
mutual funds whose shares may be distributed by the Distributor.

CLASS A. Shareholders of the Fund may exchange their Class A shares for
Class A shares of certain other Prudential Mutual Funds, shares of Prudential
Government Securities Trust (Intermediate Term Series) and shares of the money
market funds specified below. No fee or sales load will be imposed upon the
exchange. Shareholders of money market funds who acquired such shares upon
exchange of Class A shares may use the Exchange Privilege only to acquire Class
A shares of the Prudential Mutual Funds participating in the Exchange Privilege.

B-19
<PAGE>
The following money market funds participate in the Class A Exchange
Privilege:

Prudential California Municipal Fund
(California Money Market Series)
Prudential Government Securities Trust
(Money Market Series)
(U.S. Treasury Money Market Series)
Prudential Municipal Series Fund
(Connecticut Money Market Series)
(Massachusetts Money Market Series)
(New Jersey Money Market Series)
(New York Money Market Series)
Prudential MoneyMart Assets
Prudential Tax-Free Money Fund

CLASS B AND CLASS C. Shareholders of the Fund may exchange their Class B and
Class C shares for Class B and Class C shares, respectively, of certain other
Prudential Mutual Funds and shares of Prudential Special Money Market Fund, a
money market fund. No CDSC will be payable upon such exchange, but a CDSC may be
payable upon the redemption of the Class B and Class C shares acquired as a
result of an exchange. The applicable sales charge will be that imposed by the
fund in which shares were initially purchased and the purchase date will be
deemed to be the first day of the month after the initial purchase, rather than
the date of the exchange.

Class B and Class C shares of the Fund may also be exchanged for shares of
Prudential Special Money Market Fund without imposition of any CDSC at the time
of exchange. Upon subsequent redemption from such money market fund or after re-
exchange into the Fund, such shares will be subject to the CDSC calculated by
excluding the time such shares were held in the money market fund. In order to
minimize the period of time in which shares are subject to a CDSC, shares
exchanged out of the money market fund will be exchanged on the basis of their
remaining holding periods, with the longest remaining holding periods being
transferred first. In measuring the time period shares are held in a money
market fund and "tolled" for purposes of calculating the CDSC holding period,
exchanges are deemed to have been made on the last day of the month. Thus, if
shares are exchanged into the Fund from a money market fund during the month
(and are held in the Fund at the end of the month), the entire month will be
included in the CDSC holding period. Conversely, if shares are exchanged into a
money market fund prior to the last day of the month (and are held in the money
market fund on the last day of the month), the entire month will be excluded
from the CDSC holding period. For purposes of calculating the seven year holding
period applicable to the Class B conversion feature, the time period during
which Class B shares were held in a money market fund will be excluded.

At any time after acquiring shares of other funds participating in the Class
B or Class C exchange privilege, a shareholder may again exchange those shares
(and any reinvested dividends and distributions) for Class B or Class C shares
of the Fund, respectively, without subjecting such shares to any CDSC. Shares of
any fund participating in the Class B or Class C exchange privilege that were
acquired through reinvestment of dividends or distributions may be exchanged for
Class B or Class C shares of other funds, respectively, without being subject to
any CDSC.

Additional details about the Exchange Privilege and prospectuses for each of
the Prudential Mutual Funds are available from the Fund's Transfer Agent,
Prudential Securities or Prusec. The Exchange Privilege may be modified,
terminated or suspended on sixty days' notice, and any fund, including the Fund,
or the Distributor, has the right to reject any exchange application relating to
such fund's shares.

DOLLAR COST AVERAGING

Dollar cost averaging is a method of accumulating shares by investing a
fixed amount of dollars in shares at set intervals. An investor buys more shares
when the price is low and fewer shares when the price is high. The average cost
per share is lower than it would be if a constant number of shares were bought
at set intervals.

Dollar cost averaging may be used, for example, to plan for retirement, to
save for a major expenditure, such as the purchase of a home, or to finance a
college education. The cost of a year's education at a four-year college today
averages

B-20
<PAGE>
around $14,000 at a private college and around $4,800 at a public university.
Assuming these costs increase at a rate of 7% a year, as has been projected, for
the freshman class of 2007, the cost of four years at a private college could
reach $163,000 and over $97,000 at a public university.(1)

The following chart shows how much you would need in monthly investments to
achieve specified lump sums to finance your investment goals.(2)

<TABLE>
<CAPTION>
PERIOD OF
MONTHLY INVESTMENTS: $100,000 $150,000 $200,000 $250,000
- ------------------------------------------------------------------ ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
25 Years.......................................................... $ 110 $ 165 $ 220 $ 275
20 Years.......................................................... 176 264 352 440
15 Years.......................................................... 296 444 592 740
10 Years.......................................................... 555 833 1,110 1,388
5 Years.......................................................... 1,371 2,057 2,742 3,428
See "Automatic Savings Accumulation Plan."
<FN>
- ------------------------

(1)Source information concerning the costs of education at public
universities is available from The College Board Annual Survey of Colleges,
1992. Information about the costs of private colleges is from the Digest of
Education Statistics, 1992; The National Center for Educational Statistics; and
the U.S. Department of Education. Average costs for private institutions include
tuition, fees, room and board.

(2)The chart assumes an effective rate of return of 8% (assuming monthly
compounding). This example is for illustrative purposes only and is not intended
to reflect the performance of an investment in shares of the Fund. The
investment return and principal value of an investment will fluctuate so that an
investor's shares when redeemed may be worth more or less than their original
cost.
</TABLE>

AUTOMATIC SAVINGS ACCUMULATION PLAN (ASAP)

Under ASAP, an investor may arrange to have a fixed amount automatically
invested in shares of the Fund monthly by authorizing his or her bank account or
Prudential Securities account (including a Command Account) to be debited to
invest specified dollar amounts in shares of the Fund. The investor's bank must
be a member of the Automatic Clearing House System. Share certificates are not
issued to ASAP participants.

Further information about this program and an application form can be
obtained from the Transfer Agent, Prudential Securities or Prusec.

SYSTEMATIC WITHDRAWAL PLAN

A systematic withdrawal plan is available to shareholders through Prudential
Securities or the Transfer Agent. Such withdrawal plan provides for monthly or
quarterly checks in any amount, except as provided below, up to the value of the
shares in the shareholder's account. Withdrawals of Class B or Class C shares
may be subject to a CDSC. See "Shareholder Guide-- How to Sell Your
Shares--Contingent Deferred Sales Charges" in the Prospectus.

In the case of shares held through the Transfer Agent (i) a $10,000 minimum
account value applies, (ii) withdrawals may not be for less than $100 and (iii)
the shareholder must elect to have all dividends and/or distributions
automatically reinvested in additional full and fractional shares at net asset
value on shares held under this plan. See "Shareholder Investment Account--
Automatic Reinvestment of Dividends and/or Distributions."

Prudential Securities and the Transfer Agent act as agents for the
shareholder in redeeming sufficient full and fractional shares to provide the
amount of the periodic withdrawal payment. The systematic withdrawal plan may
be, terminated at any time, and the Distributor reserves the right to initiate a
fee of up to $5 per withdrawal, upon 30 days' written notice to the shareholder.

Withdrawal payments should not be considered as dividends, yield or income.
If periodic withdrawals continuously exceed reinvested dividends and
distributions, the shareholder's original investment will be correspondingly
reduced and ultimately exhausted.

Furthermore, each withdrawal constitutes a redemption of shares, and any
gain or loss realized must generally be recognized for federal income tax
purposes. In addition, withdrawals made concurrently with purchases of
additional shares are

B-21
<PAGE>
inadvisable because of the sales charge applicable to (i) the purchase of Class
A shares and (ii) the withdrawal of Class B and Class C shares. Each shareholder
should consult his or her own tax adviser with regard to the tax consequences of
the systematic withdrawal plan, particularly if used in connection with a
retirement plan.

TAX-DEFERRED RETIREMENT PLANS

Various tax-deferred retirement plans, including a 401(k) plan,
self-directed individual retirement accounts and "tax-sheltered accounts" under
Section 403(b)(7) of the Internal Revenue Code are available through the
Distributor. These plans are for use by both self-employed individuals and
corporate employers. These plans permit either self-direction of accounts by
participants, or a pooled account arrangement. Information regarding the
establishment of these plans, the administration, custodial fees and other
details is available from Prudential Securities or the Transfer Agent.

Investors who are considering the adoption of such a plan should consult
with their own legal counsel or tax adviser with respect to the establishment
and maintenance of any such plan.

TAX-DEFERRED RETIREMENT ACCOUNTS

INDIVIDUAL RETIREMENT ACCOUNTS. An individual retirement account (IRA)
permits the deferral of federal income tax on income earned in the account until
the earnings are withdrawn. The following chart represents a comparison of the
earnings in a personal savings account with those in an IRA, assuming a $2,000
annual contribution, an 8% rate of return and a 39.6% federal income tax bracket
and shows how much more retirement income can accumulate within an IRA as
opposed to a taxable individual savings account.

<TABLE>
<CAPTION>
TAX-DEFERRED COMPOUNDING(1)
CONTRIBUTIONS PERSONAL
MADE OVER: SAVINGS IRA
- ------------------------ ---------- ----------
<S> <C> <C>
10 years................ $ 26,165 $ 31,291
15 years................ 44,675 58,649
20 years................ 68,109 98,846
25 years................ 97,780 157,909
30 years................ 135,346 244,692
<FN>
- ------------------------
(1) The chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable versus
tax-deferred compounding for the periods and on the terms indicated. Earnings in
the IRA account will be subject to tax when withdrawn from the account.
</TABLE>

NET ASSET VALUE

Under the Investment Company Act, the Board of Directors is responsible for
determining in good faith the fair value of securities of the Fund. In
accordance with procedures adopted by the Board of Directors, the value of
investments listed on a securities exchange and NASDAQ National Market System
securities (other than options on stock and stock indices) are valued at the
last sales price on the day of valuation or, if there was no sale on such day,
the mean between the last bid and asked prices on such day, as provided by a
pricing service. Corporate bonds (other than convertible debt securities) and
U.S. Government securities that are actively traded in the over-the-counter
market, including listed securities for which the primary market is believed to
be over-the-counter, are valued on the basis of valuations provided by a pricing
service which uses information with respect to transactions in bonds, quotations
from bond dealers, agency ratings, market transactions in comparable securities
and various relationships between securities in determining value. Convertible
debt securities that are actively traded in the over-the-counter market,
including listed securities for which the primary market is believed to be
over-the-counter, are valued at the mean between the last reported bid and asked
prices provided by principal market makers or independent pricing agents.
Options on stock and stock indices traded on an exchange are valued at the mean
between the most recently quoted bid and asked prices on the respective exchange
and futures contracts and options thereon are valued at their last sales prices
as of the close of the commodities exchange or board of trade. Should an
extraordinary event, which is likely to affect the value of the

B-22
<PAGE>
security, occur after the close of an exchange on which a portfolio security is
traded, such security will be valued at fair value considering factors
determined in good faith by the investment adviser under procedures established
by and under the general supervision of the Fund's Board of Directors.

Securities or other assets for which market quotations are not readily
available are valued at their fair value as determined in good faith by the
Board of Directors. Short-term debt securities are valued at cost, with interest
accrued or discount amortized to the date of maturity, if their original
maturity was 60 days or less, unless this is determined by the Board of
Directors not to represent fair value. Short-term securities with remaining
maturities of 60 days or more, for which market quotations are readily
available, are valued at their current market quotations as supplied by an
independent pricing agent or principal market maker. The Fund will compute its
net asset value at 4:15 P.M., New York time, on each day the New York Stock
Exchange is open for trading except on days on which no orders to purchase, sell
or redeem Fund shares have been received or days on which changes in the value
of the Fund's portfolio securities do not affect net asset value. In the event
the New York Stock Exchange closes early on any business day, the net asset
value of the Fund's shares shall be determined at a time between such closing
and 4:15 P.M., New York time.

Net asset value is calculated separately for each class. The net asset value
of Class B and Class C shares will generally be lower than the net asset value
of Class A shares as a result of the larger distribution-related fee to which
Class B and Class C shares are subject. It is expected, however, that the net
asset value per share of each class will tend to converge immediately after the
recording of dividends which will differ by approximately the amount of the
distribution expense accrual differential among the classes.

PERFORMANCE INFORMATION

AVERAGE ANNUAL TOTAL RETURN. The Fund may from time to time advertise its
average annual total return. Average annual total return is determined
separately for Class A, Class B and Class C shares. See "How the Fund Calculates
Performance" in the Prospectus.

Average annual total return is computed according to the following formula:

P(1+T)to the power of n = ERV

Where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = Ending Redeemable Value at the end of the 1, 5 or 10 year periods
(or fractional portion thereof) of a hypothetical $1000 investment
made at the beginning of the 1, 5 or 10 year periods.

Average annual total return takes into account any applicable initial or
contingent deferred sales charges but does not take into account any federal or
state income taxes that maybe payable upon redemption.

The average annual total return for Class A shares for the one year and
since inception (January 22, 1990) periods ended September 30, 1994 was -3.93%
and 12.69%, respectively. The average annual total return for Class B shares for
the one, five and ten year periods ended on September 30, 1994 was -4.66%,
10.67% and 12.36%, respectively. The average annual total return for Class C
shares for the period August 1, 1994 through September 30, 1994 was 2.19%.

AGGREGATE TOTAL RETURN. The Fund may also advertise its aggregate total
return. Aggregate total return is determined separately for Class A, Class B and
Class C shares. See "How the Fund Calculates Performance" in the Prospectus.

Aggregate total return represents the cumulative change in the value of an
investment in the Fund and is computed according to the following formula:

ERV - P
-------

Where: P = a hypothetical initial payment of $1000.
ERV = Ending Redeemable Value at the end of the 1, 5, or 10 year
periods (or fractional portion thereof) of a hypothetical $1000
investment made at the beginning of the 1, 5 or 10 year
periods.

Aggregate total return does not take into account any federal or state
income taxes that may be payable upon redemption or any applicable initial or
contingent deferred sales charges.

B-23
<PAGE>
The aggregate total return for Class A shares for the one year and since
inception (January 22, 1990) periods ended on September 30, 1994 was 1.13% and
84.28%, respectively. The aggregate total return for Class B shares for the one,
five and ten year periods ended on September 30, 1994 was 0.34%, 67.07% and
220.90%, respectively. The aggregate total return for Class C shares for the
period August 1, 1994 through September 30, 1994 was 3.19%.

YIELD. The Fund may from time to time advertise its yield as calculated over
a 30-day period. Yield is calculated separately for Class A, Class B and Class C
shares. This yield will be computed by dividing the Fund's net investment income
per share earned during this 30-day period by the maximum offering price per
share on the last day of this period. Yield is calculated according to the
following formula:

a - b
YIELD = 2[( ------- +1)to the power of 6 - 1]
cd

Where: a=dividends and interest earned during the period.
b=expenses accrued for the period (net of reimbursements).
c=the average daily number of shares outstanding during the
period that were entitled to receive dividends.
d=the maximum offering price per share on the last day of the period.

Yield fluctuates and an annualized yield quotation is not a representation
by the Fund as to what an investment in the Fund will actually yield for any
given period.

The Fund's 30-day yields for the period ended September 30, 1994 were 0.1%,
- -.66% and -.66% for Class A, Class B and Class C shares, respectively.

From time to time, the performance of the Fund may be measured against
various indices. Set forth below is a chart which compares the performance of
different types of investments over the long-term and the rate of inflation.(1)

[GRAPHIC]

(1)Source: Ibbotson Associates, "Stocks, Bonds, Bills and Inflation--1993
Yearbook" (annually updates the work of Roger G. Ibbotson and Rex A.
Sinquefield). Common stock returns are based on the Standard & Poor's 500 Stock
Index, a market-weighted, unmanaged index of 500 common stocks in a variety of
industry sectors. It is a commonly used indicator of broad stock price
movements. This chart is for illustrative purposes only, and is not intended to
represent the performance of any particular investment or fund.

B-24
<PAGE>
TAXES

The Fund expects to pay dividends of net investment income, if any,
semi-annually. The Board of Directors of the Fund will determine at least once a
year whether to distribute any net long-term capital gains in excess of any net
short-term capital losses. In determining amounts of capital gains to be
distributed, any capital loss carryforwards from prior years will offset capital
gains. Distributions will be paid in additional Fund shares based on the net
asset value at the close of business on the record date, unless the shareholder
elects in writing not less than five full business days prior to the record date
to receive such distributions in cash.

The Fund is qualified and intends to remain qualified as a regulated
investment company under Subchapter M of the Internal Revenue Code.
Qualification as a regulated investment company under the Internal Revenue Code
requires, among other things, that (a) at least 90% of the Fund's annual gross
income (without offset for losses from the sale or other disposition of
securities or foreign currencies) be derived from dividends, interest, proceeds
from loans of securities and gains from the sale or other disposition of
securities or foreign currencies and certain financial futures, options and
forward contracts; (b) the Fund derive less than 30% of its gross income from
gains (without offset for losses) from the sale or other disposition of
securities or options thereon held for less than three months; and (c) the Fund
diversify its holdings so that, at the end of each quarter of the taxable year,
(i) at least 50% of the market value of the Fund's assets is represented by
cash, government securities and other securities limited in respect of any one
issuer to an amount not greater than 5% of the Fund's assets and 10% of the
outstanding voting securities of such issuer, and (ii) not more than 25% of the
value of its assets is invested in the securities of any one issuer (other than
government securities). In addition, in order not to be subject to federal
income tax, the Fund must distribute to its shareholders as ordinary dividends
at least 90% of its net investment income other than net capital gains earned in
each year. A 4% nondeductible excise tax will be imposed on the Fund to the
extent the Fund does not meet certain minimum distribution requirements by the
end of each calendar year. For this purpose, any income or gain retained by the
Fund which is subject to tax will be considered to have been distributed by
year-end. In addition, dividends declared in October, November and December
payable to shareholders of record on a specified date in October, November and
December and paid in the following January will be treated as having been paid
by the Fund and received by each shareholder in such prior year. Under this
rule, therefore, a shareholder may be taxed in one year on dividends or
distributions actually received in January of the following year.

Gains or losses on sales of securities by the Fund will be long-term capital
gains or losses if the securities have been held by it for more than one year,
except in certain cases where the Fund acquires a put or writes a call thereon
or otherwise holds an offsetting position with respect to the securities. Other
gains or losses on the sale of securities will be short-term capital gains or
losses. If an option written by the Fund lapses or is terminated through a
closing transaction, such as a repurchase by the Fund of the option from its
holder, the Fund will realize a short-term capital gain or loss, depending on
whether the premium income is greater or less than the amount paid by the Fund
in the closing transaction. If securities are sold by the Fund pursuant to the
exercise of a call option written by it, the Fund will add the premium received
to the sale price of the securities delivered in determining the amount of gain
or loss on the sale. If securities are purchased by the Fund pursuant to the
exercise of a put option written by it, the Fund will subtract the premium
received from its cost basis in the securities purchased. The requirement that
the Fund derive less than 30% of its gross income from gains from the sale of
securities held for less than three months may limit the Fund's ability to write
options.

Certain futures contracts and certain listed options held by the Fund will
be required to be "marked to market" for federal income tax purposes, i.e.,
treated as having been sold at their fair market value on the last day of the
Fund's taxable year (referred to as Section 1256 Contracts). 60% of any gain or
loss recognized on actual or deemed sales of such Section 1256 Contracts will be
treated as long-term capital gain or loss, and 40% of such gain or loss will be
treated as short-term capital gain or loss. The Fund may be required to defer
the recognition of losses on securities and options and futures contracts to the
extent of any recognized gain on offsetting positions held by the Fund.

Any loss realized on a sale, redemption or exchange of shares of the Fund by
a shareholder will be disallowed to the extent the shares are replaced within a
61-day period (beginning 30 days before the disposition of shares). Shares
purchased pursuant to the reinvestment of a dividend or distribution will
constitute a replacement of shares.

A shareholder who acquires shares of the Fund and sells or otherwise
disposes of such shares within 90 days of acquisition may not be allowed to
include certain sales charges incurred in acquiring such shares for purposes of
calculating gain or loss realized upon a sale or exchange of shares of the Fund.

B-25
<PAGE>
The per share dividends on Class B and Class C shares, if any, will be lower
than the per share dividends on Class A shares as a result of the higher
distribution-related fee applicable with the Class B and Class C shares. The per
share distributions of net capital gains, if any, will be paid in the same
amount for Class A, Class B and Class C shares. See "Net Asset Value."

Any dividends or distributions paid shortly after a purchase by an investor
may have the effect of reducing the per share net asset value of the investor's
shares by the per share amount of the dividends or distributions. Furthermore,
such dividends or distributions, although in effect a return of capital, are
subject to federal income taxes. Prior to purchasing shares of the Fund,
therefore, the investor should carefully consider the impact of dividends or
capital gains distributions which are expected to be or have been announced.

Dividends and distributions may also be subject to state and local taxes.

The Fund may, from time to time, invest in Passive Foreign Investment
Companies (PFICs). PFICs are foreign corporations which derive a majority of
their income from passive sources. For tax purposes, the Fund's investments in
PFICs may subject the Fund to federal income taxes on certain income and gains
realized by the Fund. Under proposed Treasury regulations, the Fund would be
able to avoid such taxes and interest by electing to "mark-to-market" its
investments in PFICs (I.E., treat them as sold for fair market value at the end
of the year).

Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Income tax
treaties between certain countries and the United States may reduce or eliminate
such taxes. It is impossible to determine in advance the effective rate of
foreign tax to which the Fund will be subject, since the amount of the Fund's
assets to be invested in various countries is not known.

PENNSYLVANIA PERSONAL PROPERTY TAX. The Fund has received a written letter
of determination from the Pennsylvania Department of Revenue that the Fund will
be subject to the Pennsylvania foreign franchise and corporate net income tax.
Accordingly, it is believed that Fund shares are exempt from Pennsylvania
personal property taxes. The Fund anticipates that it will continue such
business activities but reserves the right to suspend them at any time,
resulting in the termination of the exemption.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS

State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, serves as Custodian for the Fund's portfolio securities and
cash and, in that capacity, maintains certain financial and accounting books and
records pursuant to an agreement with the Fund. See "How the Fund Is
Managed--Custodian and Transfer and Dividend Disbursing Agent" in the
Prospectus.

Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as the Transfer and Dividend Disbursing Agent of the Fund.
It is a wholly-owned subsidiary of PMF. PMFS provides customary transfer agency
services to the Fund, including the handling of shareholder communications, the
processing of shareholder transactions, the maintenance of shareholder account
records, payment of dividends and distributions, and related functions. For
these services, PMFS receives an annual fee per shareholder account, a new
account set-up fee for each manually-established account and a monthly inactive
zero balance account fee per shareholder account. PMFS is also reimbursed for
its out-of-pocket expenses, including, but not limited to, postage, stationery,
printing, allocable communications expenses and other costs. For the fiscal year
ended September 30, 1994, the Fund incurred fees of approximately $800,000 for
the services of PMFS.

Price Waterhouse LLP, 1177 Avenue of the Americas, New York, New York 10036,
serves as the Fund's independent accountants and in that capacity examines the
Fund's annual financial statements.

B-26
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. PORTFOLIO OF INVESTMENTS
SEPTEMBER 30, 1994
<TABLE>
<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
LONG-TERM INVESTMENTS
COMMON STOCKS--95.1%
AEROSPACE/DEFENSE--2.7%
553,600 Precision Castparts Corp............. $ 14,186,000
------------
AUTOMOBILES--1.1%
250,000+ Jason, Inc.*
(cost $2,200,000; purchase
date--1/21/94)..................... 1,912,500
31,700 Mascotech, Inc....................... 376,437
115,100 Standard Products Co................. 2,877,500
46,000 Tower Automotive, Inc.*.............. 534,750
------------
5,701,187
------------
BANKING--8.0%
153,000 Bank South Corp...................... 2,830,500
50,000 Charter One Financial, Inc........... 1,025,000
8,700 Citfed Bancorp, Inc.................. 282,750
155,000 Commercial Federal Corp.*............ 3,836,250
270,000 Community First Bankshares, Inc...... 4,252,500
135,000 Dauphin Deposit Corp................. 3,375,000
100,000 First Commerce Corp.................. 2,675,000
95,000 First Security Corp.................. 2,755,000
36,400 First Virginia Banks, Inc............ 1,396,850
120,000 Hawkeye Bancorporation............... 2,535,000
360,000 Riggs National Corp.*................ 3,667,500
200,000 Rochester Community Savings
Bank*.............................. 3,875,000
86,050 SouthTrust Corp...................... 1,721,000
30,000 TCF Financial Corp................... 1,181,250
225,000 Washington Mutual Savings Bank....... 4,584,375
80,000 West One Bancorp..................... 2,240,000
------------
42,232,975
------------
CABLE & PAY TELEVISION SYSTEMS--1.3%
91,700 Comcast Corp. (voting)............... 1,398,425
45,800 Comcast Corp. (non-voting)........... 701,312
192,300 TCA Cable TV, Inc.................... 4,687,313
------------
6,787,050
------------
COMMERCIAL SERVICES--1.8%
124,100 AAR Corp............................. 1,613,300

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
40,000 Banner Aerospace, Inc.*.............. $ 225,000
66,800 Flightsafety International, Inc...... 2,588,500
190,000 SafeCard Services, Inc.*............. 2,992,500
62,300 Sterling Software, Inc.*............. 1,931,300
------------
9,350,600
------------
COMPUTER HARDWARE--2.7%
190,000 Electronics for Imaging, Inc.*....... 4,987,500
70,600 Quixote Corp......................... 1,235,500
380,000 Telxon Corp.......................... 5,225,000
130,000 VeriFone, Inc.*...................... 3,038,750
------------
14,486,750
------------
COMPUTER SOFTWARE & SERVICES--3.4%
277,300 American Management Systems,
Inc.*.............................. 6,516,550
235,000 Continuum, Inc.*..................... 5,316,875
148,000 INTERLINQ Software Corp.*............ 740,000
12,000 Learning Co.*........................ 237,000
275,000 Primark Corp.*....................... 3,506,250
18,300 SunGard Data Systems*................ 649,650
89,200 Westcott Communications, Inc.*....... 1,220,925
------------
18,187,250
------------
CONSTRUCTION--0.4%
55,000 Centex Corp.......................... 1,271,875
123,500 Willcox & Gibbs, Inc.*............... 895,375
------------
2,167,250
------------
CONSUMER PRODUCTS--1.8%
275,000 Fedders Corp.*....................... 1,306,250
550,000 Fedders USA, Inc.*................... 2,887,500
100,000 Helene Curtis Industries, Inc........ 3,437,500
84,500 Russ Berrie & Co., Inc............... 1,204,125
19,600 Sealright Co., Inc................... 303,800
44,600 Windmere Corp........................ 485,024
------------
9,624,199
------------
- --------------------------------------------------------------

See Notes to Financial Statements.

B-27

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
CONSUMER SERVICES--0.8%
205,300 Aviall, Inc.......................... $ 2,104,325
161,300 Regis Corp.*......................... 2,379,175
------------
4,483,500
------------
DRUGS & MEDICAL SUPPLIES--1.2%
113,800 Endosonics Corp.*.................... 796,600
30,500 Medex, Inc........................... 423,187
150,000 Sybron Corp.*........................ 5,175,000
------------
6,394,787
------------
ELECTRICAL EQUIPMENT--0.5%
120,000 Belden, Inc.......................... 2,490,000
------------
ELECTRONICS--7.3%
49,500 Anthem Electronics, Inc.*............ 1,596,375
100,000 Augat, Inc........................... 2,200,000
196,100 Cirrus Logic, Inc.*.................. 5,490,800
365,000 Kemet Corp.*......................... 7,665,000
280,200 Laser Precision Corp.*............... 1,646,175
410,000 Marshall Industries, Inc.*........... 10,301,250
400,000 Methode Eletronics, Inc.............. 7,900,000
125,000 Woodhead Industries, Inc............. 1,875,000
------------
38,674,600
------------
ENVIRONMENTAL SERVICES--0.9%
61,800 Applied Bioscience International,
Inc.*.............................. 324,450
216,000 BHA Group, Inc....................... 2,808,000
100,000 USA Waste Services, Inc.*............ 1,500,000
------------
4,632,450
------------
FINANCIAL SERVICES--0.9%
40,000 GFC Financial Corp................... 1,425,000
165,000 McDonald & Co. Investments, Inc...... 2,124,375
120,000 Piper Jaffray, Inc................... 1,185,000
------------
4,734,375
------------

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
FOOD & BEVERAGES--2.5%
257,500 Michaels Foods, Inc.................. $ 2,832,500
392,000 Rykoff - Sexton, Inc.*............... 7,546,000
136,200 Sanderson Farms, Inc................. 2,621,850
------------
13,000,350
------------
FOREST PRODUCTS--2.3%
275,000 Mercer International, Inc.*.......... 3,334,375
150,000 Mosinee Paper Corp................... 4,593,750
107,500 Pentair, Inc......................... 4,246,250
------------
12,174,375
------------
HEALTH CARE SERVICES--2.3%
90,000 Living Centers of America, Inc.*..... 2,846,250
107,500 National Health Labs Holdings,
Inc................................ 1,384,062
14,700 Safeguard Health Enterprises*........ 147,919
175,700 Salick Health Care, Inc.*............ 3,777,550
36,800 Sofamor/Danek Group, Inc.*........... 713,000
215,600 Unilab Corp.*........................ 1,158,850
68,500 Universal Health Services, Inc.*..... 1,935,125
------------
11,962,756
------------
HOTELS & LEISURE--0.5%
54,700 Caesars World, Inc.*................. 2,372,613
------------
HOUSEHOLD PRODUCTS--0.9%
265,400 Libbey, Inc.......................... 4,578,150
------------
INDUSTRIALS--7.4%
145,000 Amcast Industrial Corp............... 3,353,125
181,600 Carlisle Companies, Inc.............. 5,902,000
50,000 Diebold, Inc......................... 2,056,250
40,100 ESSEF Corp.*......................... 591,475
18,000 Harmon Industries, Inc............... 373,500
135,000 Johnstown America Industries, Inc.*.. 3,611,250
250,000 Mark IV Industries, Inc.............. 5,687,500
14,300 Matrix Service Co.*.................. 91,163
205,000 Medalist Industries, Inc.*........... 1,435,000

See Notes to Financial Statements.

B-28

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
INDUSTRIALS (CONT'D)
48,600 Park Ohio Industries, Inc.*.......... $ 631,800
96,700 Rogers Corp.*........................ 3,287,800
153,800 Schulman, Inc........................ 4,152,600
260,000 Shorewood Packaging Corp.*........... 5,590,000
15,700 SPS Technologies, Inc................ 412,125
109,250 Varlen Corp.......................... 2,540,063
------------
39,715,651
------------
INFORMATION SERVICES--0.3%
111,300 American Business Information,
Inc................................ 1,641,675
------------
INSURANCE--2.6%
166,000 Amvestors Financial Corp.*........... 1,660,000
84,000 CCP Insurance, Inc................... 1,921,500
104,600 Life Re Corp......................... 2,222,750
221,400 Philadelphia Consolidated
Holding Corp.*..................... 3,099,600
200,000 SCOR U.S. Corp....................... 2,250,000
450,000 Southwestern Life Corp.*............. 2,587,500
------------
13,741,350
------------
LEISURE--0.9%
88,800 Johnson Worldwide Associates, Inc.*.. 2,353,200
380,000 Topps Co............................. 2,351,250
------------
4,704,450
------------
MACHINERY & EQUIPMENT--6.7%
132,800 Bearings, Inc........................ 4,100,200
335,700 Brenco, Inc.......................... 4,238,213
126,100 GATX Corp............................ 5,107,050
309,300 Gerber Scientific, Inc............... 4,678,162
210,200 Lamson & Sessions Co.*............... 1,471,400
140,600 Lufkin Industries, Inc............... 2,636,250
111,600 Maverick Tube Corp*.................. 1,129,950

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
280,000 Measurex Corp........................ $ 5,950,000
400,000 Regal Beloit Corp.................... 6,100,000
------------
35,411,225
------------
MEDIA--0.6%
115,000 Scripps (E.W.) Co.................... 3,378,125
------------
NATURAL RESOURCES--0.1%
117,500 Nord Resources Corp.*................ 778,438
------------
OFFICE EQUIPMENT--0.5%
110,000 Miller Herman, Inc................... 2,729,374
------------
OIL & GAS EXPLORATION/PRODUCTION--7.5%
128,500 Basin Exploration, Inc.*............. 1,445,625
55,000 Belden & Blake Corp.*................ 770,000
7,500 Cabot Oil & Gas Corp................. 137,813
120,000 Diamond Shamrock, Inc................ 3,090,000
243,000 Dreco Energy Services Ltd.*.......... 2,247,750
170,000 Energy Service, Inc.*................ 2,528,750
30,000 Enterra Corp.*....................... 667,500
54,000 Evergreen Resources, Inc.*........... 391,500
240,000 International Colin Energy Co........ 1,890,000
346,014 KN Energy, Inc....................... 9,039,616
320,000 Lomak Petroleum, Inc.*............... 2,600,000
525,000 Mesa, Inc.*.......................... 2,887,500
120,000 Mitchell Energy & Dev. Corp.,
Class A............................ 2,115,000
168,550 Mitchell Energy & Dev. Corp.,
Class B............................ 2,907,488
232,300 Weatherford International, Inc.*..... 2,874,712
175,000 Western Gas Resources, Inc........... 3,806,250
------------
39,399,504
------------
OIL SERVICES--0.6%
300,000 Pride Petroleum Services, Inc.*...... 1,518,750
94,600 Western Co. of North America*........ 1,679,150
------------
3,197,900
------------
PACKAGING--0.1%
24,200 AptarGroup, Inc...................... 653,400
------------

See Notes to Financial Statements.

B-29

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
PUBLISHING--2.4%
125,000 Central Newspapers, Inc.............. $ 3,562,500
120,000 Lee Enterprises, Inc................. 4,140,000
170,000 McClatchy Newspapers, Inc.*.......... 4,037,500
61,700 Pages, Inc.*......................... 431,900
30,900 Western Publishing Group, Inc.*...... 397,838
------------
12,569,738
------------
REALTY--3.2%
100,000 Duke Reality Investments, Inc........ 2,500,000
170,000 Equity Residential Property Trust.... 5,397,500
80,300 Kimco Realty Corp.................... 2,910,875
79,200 Manufactured Home Community, Inc..... 1,584,000
64,100 Vornado Realty Trust................. 2,195,425
70,000 Weingarten Realty Investors.......... 2,502,500
------------
17,090,300
------------
RESTAURANTS--1.1%
40,200 Buffets, Inc.*....................... 633,150
27,600 Rock Bottom Restaurants, Inc.*....... 358,800
180,000 Sbarro, Inc.......................... 4,590,000
------------
5,581,950
------------
RETAIL--4.2%
262,000 Babbage's, Inc.*..................... 3,275,000
55,700 Michael Anthony Jewelers, Inc.*...... 320,275
389,000 Software Etc. Stores, Inc.*.......... 3,598,250
350,700 Stride Rite Corp..................... 4,909,800
172,700 Tiffany & Co......................... 6,389,900
185,000 Younkers, Inc.*...................... 3,515,000
------------
22,008,225
------------
SPECIALTY CHEMICALS--4.2%
130,200 Brush Wellman, Inc................... 2,083,200
340,000 Cabot Corp........................... 9,265,000
25,200 Mississippi Chemical Corp............ 478,800
80,000 Potash Corp.......................... 3,270,000
36,100 Raychem Corp......................... 1,480,100
166,000 Vigoro Corp.......................... 5,872,250
------------
22,449,350
------------

<CAPTION>
- --------------------------------------------------------------
Value
Shares Description (Note 1)
- --------------------------------------------------------------
<C> <S> <C>
STEEL--4.2%
179,000 Quanex Corp.......................... $ 4,698,750
36,600 Reliance Steel & Aluminum Co.*....... 576,450
532,600 Trinity Industries, Inc.............. 16,910,050
------------
22,185,250
------------
TELECOMMUNICATIONS--1.4%
114,200 Intermediate Telephone, Inc.*........ 1,084,900
230,000 Intertrans Corp...................... 2,932,500
157,700 National Data Corp................... 3,390,550
------------
7,407,950
------------
TRANSPORTATION--3.8%
155,000 Air Express International Corp....... 4,281,875
275,000 American President Cos., Ltd......... 6,943,750
340,000 Expeditors International of
Washington, Inc.................... 6,800,000
119,000 Harper Group, Inc.................... 1,785,000
66,700 WorldCorp, Inc.*..................... 450,225
------------
20,260,850
------------
Total common stocks
(cost $464,064,893)................ 503,125,922
------------

PRINCIPAL
AMOUNT SHORT-TERM INVESTMENT
(000) REPURCHASE AGREEMENT--1.5%
- ---------
<C> <S> <C>
$ 7,677 Joint Repurchase Agreement Account,
4.83%, 10/3/94 (Note 5)
(cost $7,677,000).................. 7,677,000
------------
TOTAL INVESTMENTS--96.6%
(cost $471,741,893; Note 4)........ 510,802,922
Other assets in excess of
liabilities--3.4%.................. 18,046,251
------------
NET ASSETS--100%..................... $528,849,173
------------
------------

<FN>
- -------------------------
* Non-income producing security.
** Private placement restricted as to resale; includes registration rights
under which the Fund may demand registration by the issuer.
</TABLE>

See Notes to Financial Statements.

B-30

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF ASSETS AND LIABILITIES

<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, 1994
------------------
<S> <C>
Investments, at value (cost $471,741,893)................... $510,802,922
Receivable for Fund shares sold............................. 20,893,712
Receivable for investments sold............................. 10,080,422
Dividends and interest receivable........................... 795,510
Other assets................................................ 8,490
-------------
Total assets.............................................. 542,581,056
-------------
LIABILITIES
Payable for investments purchased........................... 11,334,171
Payable for Fund shares reacquired.......................... 1,488,697
Distribution fee payable.................................... 359,030
Management fee payable...................................... 294,748
Accrued expenses and other liabilities...................... 255,237
-------------
Total liabilities......................................... 13,731,883
-------------
NET ASSETS.................................................. $528,849,173
-------------
-------------
Net assets were comprised of:
Common stock, at par...................................... $ 438,339
Paid-in capital in excess of par.......................... 454,437,821
-------------
454,876,160
Accumulated net investment income......................... 444,381
Accumulated net realized gain on investments.............. 34,467,603
Net unrealized appreciation on investments................ 39,061,029
-------------
Net assets, September 30, 1994.............................. $528,849,173
-------------
-------------
Class A:
Net asset value and redemption price per share
($103,078,061 DIVIDED BY 8,311,301 shares of common stock
issued and outstanding)................................. $12.40
Maximum sales charge (5.0% of offering price)............. .65
------
Maximum offering price to public.......................... $13.05
------
------
Class B:
Net asset value, offering price and redemption price
per share ($425,502,483 DIVIDED BY 35,500,194 shares of
common stock issued and outstanding)................... $11.99
------
------
Class C:
Net asset value, offering price and redemption price
per share ($268,629 DIVIDED BY 22,412 shares of common stock
issued and outstanding)................................ $11.99
------
------
</TABLE>

See Notes to Financial Statements.

B-31

<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF OPERATIONS

<TABLE>
<CAPTION>
YEAR ENDED
SEPTEMBER 30,
NET INVESTMENT LOSS 1994
-------------
<S> <C>
Income
Dividends............................ $ 5,698,990
Interest............................. 934,384
-------------
Total income...................... 6,633,374
-------------
Expenses
Distribution fee--Class A............ 229,425
Distribution fee--Class B............ 4,002,398
Distribution fee--Class C............ 292
Management fee....................... 3,484,730
Transfer agent's fees and expenses... 970,000
Reports to shareholders.............. 345,000
Custodian's fees and expenses........ 285,000
Registration fees.................... 175,000
Franchise taxes...................... 50,000
Audit fee............................ 46,000
Legal fees........................... 35,000
Directors' fees...................... 30,200
Miscellaneous........................ 22,058
-------------
Total expenses..................... 9,675,103
-------------
Net investment loss.................... (3,041,729)
-------------
REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS
Net realized gain (loss) on
investment transactions.............. 44,673,230
Net change in unrealized
appreciation of investments.......... (38,737,408)
-------------
Net gain on investments................ 5,935,822
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS.............. $ 2,894,093
-------------
-------------

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
STATEMENT OF CHANGES IN NET ASSETS

YEAR ENDED SEPTEMBER 30,
INCREASE (DECREASE) ----------------------------
IN NET ASSETS 1994 1993
------------ ------------
<S> <C> <C>
Operations
Net investment loss.... $ (3,041,729) $ (1,311,418)
Net realized gain on
investments.......... 44,673,230 23,835,926
Net change in
unrealized
appreciation of
investments.......... (38,737,408) 64,901,994
------------ ------------
Net increase in net
assets resulting from
operations........... 2,894,093 87,426,502
------------ ------------
Net equalization
credits................ 70,234 90,512
------------ ------------
Distributions from net
capital gain (Note 1)
Class A................ (5,775,787) (5,979,973)
Class B................ (24,227,795) (24,035,427)
------------ ------------
(30,003,582) (30,015,400)
------------ ------------
Fund share transactions
(Note 6)
Net proceeds from
shares subscribed.... 433,710,426 453,141,309
Net asset value of
shares issued in
reinvestment of
distributions........ 28,758,329 28,283,287
Cost of shares
reacquired........... (377,490,019) (284,879,535)
------------ ------------
Net increase in net
assets from Fund
share transactions... 84,978,736 196,545,061
------------ ------------
Total increase........... 57,939,481 254,046,675
NET ASSETS
Beginning of year........ 470,909,692 216,863,017
------------ ------------
End of year.............. $528,849,173 $470,909,692
------------ ------------
------------ ------------
</TABLE>

See Notes to Financial Statements.

B-32
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

NOTES TO FINANCIAL STATEMENTS

Prudential Growth Opportunity Fund, Inc. (the "Fund") is registered under
the Investment Company Act of 1940 as a diversified, open-end management
investment company. The investment objective of the Fund is to achieve capital
growth, consistent with reasonable risk, by investing in a carefully selected
portfolio of common stocks having prospects of a high return on equity,
increasing earnings, increasing dividends and price-earnings ratios which are
not excessive.

NOTE 1. ACCOUNTING The following is a summary of significant
POLICIES accounting policies followed by the Fund in the
preparation of its financial statements.

SECURITIES VALUATIONS: Investments traded on a national securities exchange are
valued at the last reported sales price on the primary exchange on which they
are traded. Securities traded in the over-the-counter market (including
securities listed on exchanges whose primary market is believed to be
over-the-counter) and listed securities for which no sale was reported on that
date are valued at the mean between the last reported bid and asked prices. Any
security for which a reliable market quotation is unavailable is valued at fair
value as determined in good faith by or under the direction of the Fund's Board
of Directors.

Short-term securities which mature in more than 60 days are valued based upon
current market quotations. Short-term securities which mature in 60 days or less
are valued at amortized cost.

In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, take
possession of the underlying collateral securities, the value of which exceeds
the principal amount of the repurchase transaction, including accrued interest.
If the seller defaults and the value of the collateral declines or if bankruptcy
proceedings are commenced with respect to the seller of the security,
realization of the collateral by the Fund may be delayed or limited.

All securities are valued as of 4:15 P.M., New York time.

SECURITIES TRANSACTIONS AND INVESTMENT INCOME: Securities transactions are
recorded on the trade date. Realized gains and losses on sales of investments
are calculated on the identified cost basis. Dividend income is recorded on the
ex-dividend date; interest income is recorded on the accrual basis.

EQUALIZATION: The Fund follows the accounting practice known as equalization, by
which a portion of the proceeds from sales and costs of reacquisitions of Fund
shares, equivalent on a per share basis to the amount of distributable net
investment income on the date of the transaction, is credited or charged to
undistributed net investment income. As a result, undistributed net investment
income per share is unaffected by sales or reacquisitions of the Fund's shares.

DIVIDENDS AND DISTRIBUTIONS: The Fund expects to pay dividends of net investment
income, if any, semi-annually and make distributions at least annually of any
net capital gains. Dividends and distributions are recorded on the ex-dividend
date.

Income distributions and capital gain distributions are determined in
accordance with income tax regulations which may differ from generally accepted
accounting principles.

RECLASSIFICATION OF CAPITAL ACCOUNTS: The Fund accounts and reports for
distributions to shareholders in accordance with Statement of Position 93-2:
Determination, Disclosure, and Financial Statement Presentation of Income,
Capital Gain, and Return of Capital Distributions by Investment Companies.
During the fiscal year ended September 30, 1994, the reclassification of
$4,353,147 of current and prior fiscal year net operating losses increased
paid-in capital by $1,311,418, increased undistributed net investment income by
$3,041,729, and decreased net accumulated realized gains by $4,353,147. Net
investment income, net realized gains, and net assets were not affected by this
change.

NOTE 2. AGREEMENTS The Fund has a management agreement with
Prudential Mutual Fund Management, Inc. ("PMF").
Pursuant to this agreement, PMF has responsibility for all investment advisory
services and supervises the subadviser's performance of such services. PMF has
entered into a subadvisory agreement

B-33
<PAGE>

with The Prudential Investment Corporation ("PIC"); PIC furnishes investment
advisory services in connection with the management of the Fund. PMF pays for
the cost of the subadviser's services, the compensation of officers of the Fund,
occupancy and certain clerical and bookkeeping costs of the Fund. The Fund
bears all other costs and expenses.

The management fee paid PMF is computed daily and payable monthly, at an
annual rate of .70 of 1% of the Fund's average daily net assets.

The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. ("PMFD"), which acts as the distributor of the Class A
shares of the Fund, and with Prudential Securities Incorporated ("PSI"), which
acts as distributor of the Class B and Class C shares of the Fund (collectively
the "Distributors"). The Fund compensates the Distributors for distributing
and servicing the Fund's Class A, Class B and Class C shares, pursuant to plans
of distribution, (the "Class A, B and C Plans"). The distribution fees are
accrued daily and payable monthly.

On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B distribution plans under which the distribution plans became
compensation plans, effective August 1, 1994. Prior thereto, the distribution
plans were reimbursement plans under which PMFD and PSI were reimbursed for
expenses actually incurred by them up to the amount permitted under the Class A
and Class B Plans, respectively. The Fund is not obligated to pay any prior or
future excess distribution costs (costs incurred by the Distributors in excess
of distribution fees paid by the Fund and contingent deferred sales charges
received by the Distributors). The rate of the distribution fees charged to
Class A and Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.

Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, 1% and
1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Class A Plan were .20 of 1% of the average
daily net assets of the Class A shares for the three months ended December 31,
1993. Effective January 1, 1994, the Class A Plan distribution expenses were
increased to .25 of 1% of the average daily net assets. Such expenses under the
Plans were 1% of the average daily net assets of both the Class B and C shares
for the fiscal year ended September 30, 1994.

PMFD has advised the Fund that it has received approximately $498,400 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended September 30, 1994. From these fees, PMFD paid such sales charges to
PSI and Pruco Securities Corporation, affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.

PSI has advised the Fund that for the fiscal year ended September 30, 1994,
it received approximately $796,400 in contingent deferred sales charges imposed
upon certain redemptions by Class B shareholders.

PMFD is a wholly-owned sudsidiary of PMF; PSI, PMF and PIC are indirect
wholly-owned subsidiaries of The Prudential Insurance Company of America.

NOTE 3. OTHER Prudential Mutual Fund Services, Inc. ("PMFS"),
TRANSACTIONS a wholly-owned subsidiary of PMF, serves as
WITH AFFILIATES the Fund's transfer agent. During the year ended
September 30, 1994, the Fund incurred fees of
approximately $800,000 for the services of PMFS. As of September 30, 1994,
approximately $62,000 of such fees were due to PMFS.

For year ended September 30, 1994, PSI earned approximately $11,000 in
brokerage commissions from portfolio transactions executed on behalf of the
Fund.

NOTE 4. PORTFOLIO Purchases and sales of investment securities,
SECURITIES other than short-term investments, for the
year ended September 30, 1994 were $435,176,534
and $389,300,903, respectively.

The federal income tax basis of the Fund's investments at September 30, 1994
was $472,413,928 and, accordingly, net unrealized appreciation for federal
income tax purposes was $38,388,994 (gross unrealized appreciation--$58,715,195
gross unrealized depreciation--$20,326,201).

NOTE 5. JOINT The Fund, along with other affiliated registered
REPURCHASE investment companies, transfers uninvested cash
AGREEMENT balances into a single joint account, the daily
ACCOUNT aggregate balance of which is invested in one or
more repurchase agreements collateralized by
U.S. Treasury or federal agency obligations. As of September 30, 1994, the
Fund had a 1.1% undivided interest in the repurchase agreements in the joint
account. The undivided interest for the Fund represented $7,677,000 in principal
amount. As of such date, each repurchase agreement in the joint account and the
collateral therefor were as follows:

B-34
<PAGE>

Goldman, Sachs & Co., 4.85%, in the principal amount of $237,000,000,
repurchase price $237,095,787, due 10/3/94. The value of the collateral
including accrued interest is $242,478,687.

Nomura Securities International, 4.75%, in the principal amount of
$237,000,000, repurchase price $237,093,812, due 10/3/94. The value of the
collateral including accrued interest is $241,948,993.

Smith Barney, Inc., 4.88%, in the principal amount of $237,000,000,
repurchase price $237,096,380, due 10/3/94. The value of the collateral
including accrued interest is $241,950,829.

NOTE 6. CAPITAL The Fund currently offers Class A, Class B and
Class C shares. Class A shares are sold with a
front-end sales charge of up to to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing in or about February 1995.

Transactions in shares of common stock for the fiscal years ended
September 30, 1994 and 1993 were as follows:

Class A Shares Amount
- ---------------------------- ----------- -------------
<S> <C> <C>
Year ended September 30,
1994:
Shares sold................. 9,370,171 $ 115,130,689
Shares issued in
reinvestment of
distributions............. 467,222 5,644,046
Shares reacquired........... (8,789,620) (108,081,971)
----------- -------------
Net increase in shares
outstanding............... 1,047,773 $ 12,692,764
----------- -------------
----------- -------------
Year ended September 30,
1993:
Shares sold................. 7,753,935 $ 136,609,388
Shares issued in
reinvestment of
distributions............. 350,531 5,794,272
Shares issued as a result of
3 for 2 stock split....... 2,387,650 --
Shares reacquired........... (5,886,921) (104,383,394)
----------- -------------
Net increase in shares
outstanding............... 4,605,195 $ 38,020,266

----------- -------------
----------- -------------

Class B Shares Amount
- ---------------------------- ----------- -------------
<S> <C> <C>
Year ended September 30,
1994:
Shares sold................. 26,537,335 $ 318,270,570
Shares issued in
reinvestment of
distributions............. 1,960,499 23,114,283
Shares reacquired........... (22,525,818) (269,363,510)
----------- -------------
Net increase in shares
outstanding............... 5,972,016 $ 72,021,343
----------- -------------
----------- -------------
Year ended September 30,
1993:
Shares sold................. 18,585,281 $ 316,531,921
Shares issued in
reinvestment of
distributions............. 1,382,238 22,489,015
Shares issued as a result of
3 for 2 stock split....... 9,826,606 --
Shares reacquired........... (10,612,911) (180,496,141)
----------- -------------
Net increase in shares
outstanding............... 19,181,214 $ 158,524,795
----------- -------------
----------- -------------
Class C
- ----------------------------
August 1, 1994* through Sep-
tember 30, 1994:
Shares sold................. 26,125 $ 309,167
Shares reacquired........... (3,713) (44,538)
----------- -------------
Net increase in shares
outstanding............... 22,412 $ 264,629
----------- -------------
----------- -------------
<FN>
- ---------------
* Commencement of offering of Class C shares.
</TABLE>

NOTE 7. DIVIDENDS On November 15, 1994 the Board of Directors
AND DISTRIBUTIONS of the Fund declared dividends from net
capital gains to Class A, B and C shareholders of
$.835 per share, payable on November 29, 1994 to shareholders of record on
November 22, 1994.

B-35
<PAGE>

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Class A Class B
--------------------------------------------------------------------------- -----------------------
January 22,
1990+
Year Ended September 30, Through Year Ended September 30,
----------------------------------------------------------- September 30, -----------------------
1994** 1993**++ 1992**++ 1991++ 1990++ 1994** 1993**++
----------- --------- -------- ------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............... $ 13.06 $ 11.25 $ 10.16 $ 7.36 $ 8.55 $ 12.74 $ 11.08
---------- -------- -------- ------- --------- --------- --------
INCOME FROM INVESTMENT
OPERATIONS
Net investment income
(loss)............... -- .03 .02 .05 .09 (.09) (.06)
Net realized and
unrealized gain
(loss) on investment
transactions......... .13 3.14 1.47 2.82 (1.20) .13 3.08
---------- -------- -------- ------- --------- --------- --------
Total from investment
operations......... .13 3.17 1.49 2.87 (1.11) .04 3.02
---------- -------- -------- ------- --------- --------- --------
LESS DISTRIBUTIONS
Dividends from net
investment income.... -- -- -- (.07) (.08) -- --
Distributions from net
realized capital
gain................. (.79) (1.36) (.40) -- -- (.79) (1.36)
---------- -------- -------- ------- --------- --------- --------

Total distributions.... (.79) (1.36) (.40) (.07) (.08) (.79) (1.36)
---------- -------- -------- ------- --------- --------- --------
Net asset value, end of
period............... $ 12.40 $ 13.06 $ 11.25 $ 10.16 $ 7.36 $ 11.99 $ 12.74
---------- -------- -------- ------- --------- --------- --------
---------- -------- -------- ------- --------- --------- --------
TOTAL RETURN#:......... 1.13% 30.42% 15.39% 39.39% (13.19)% .34% 29.40%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of
period (000)......... $ 103,078 $ 94,842 $ 44,845 $25,165 $ 17,222 $ 425,502 $376,068
Average net assets
(000)................ $ 97,877 $ 69,801 $ 36,011 $20,650 $ 132,627 $ 399,920 $278,659
Ratios to average net
assets:##
Expenses, including
distribution
fees............... 1.33% 1.17% 1.33% 1.50% 1.61%* 2.09% 1.97%
Expenses, excluding
distribution
fees............... 1.09% .97% 1.13% 1.30% 1.42%* 1.09% .97%
Net investment income
(loss)............... .00% .26% .19% .59% 1.54%* (.76)% (.54)%
Portfolio turnover..... 82% 68% 99% 111% 79% 82% 68%

<CAPTION>
Class B Class C
------------------------------- --------------
August 1,
1994@
Through
September 30,
1992**++ 1991++ 1990++ 1994**
-------- -------- -------- ------
<S> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............... $ 10.11 $ 7.34 $ 9.11 $11.61
-------- -------- -------- ------
Income from investment
operations
Net investment income
(loss)............... (.07) (.02) .07 (.01)
Net realized and
unrealized gain
(loss) on investment
transactions......... 1.44 2.82 (1.75) .39
-------- -------- -------- ------
Total from investment
operations......... 1.37 2.80 (1.68) .38
-------- -------- -------- ------

Less distributions
Dividends from net
investment income.... -- (.03) (.09) --
Distributions from net
realized capital
gain................. (.40) -- -- --
-------- -------- -------- ------

Total distributions.... (.40) (.03) (.09) --
-------- -------- -------- ------
Net asset value, end of
period............... $ 11.08 $ 10.11 $ 7.34 $11.99
-------- -------- -------- ------
-------- -------- -------- ------

TOTAL RETURN#:......... 14.27% 38.33% (18.63)% 3.19%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (000)......... $172,018 $118,660 $ 86,440 $ 269
Average net assets
(000)................ $154,601 $104,508 $132,622 $ 179
Ratios to average net
assets:##
Expenses, including
distribution
fees............... 2.13% 2.30% 2.18% 2.22%*
Expenses, excluding
distribution
fees............... 1.13% 1.30% 1.28% 1.22%*
Net investment income
(loss)............... (.61)% (.21)% .91% (.31)%*
Portfolio turnover..... 99% 111% 79% 82%

<FN>
- ---------------
* Annualized.
** Calculated based upon weighted average shares outstanding during the
period.
+ Commencement of offering of Class A shares.
@ Commencement of offering of Class C shares.
++ Restated to reflect 3 for 2 stock split paid to shareholders of record
on September 17, 1993.
# Total return does not consider the effects of sales loads. Total return
is calculated assuming a purchase of shares on the first day and a sale
on the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a
full year are not annualized.
## Because of the event referred to in @ and the timing of such, the ratios
for Class C shares are not necessarily comparable to that of Class A or
B shares and are not necessarily indicative of future ratios.
</TABLE>

See Notes to Financial Statements.

B-36
<PAGE>

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Directors of Prudential Growth Opportunity
Fund, Inc.

In our opinion, the accompanying statement of assets and liabilities,
including the portfolio of investments, and the related statements of operations
and of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Prudential Growth Opportunity Fund
(the "Fund") at September 30, 1994, 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 then ended and the financial highlights for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audits, which included confirmation of securities at
September 30, 1994 by correspondence with the custodian and brokers, and the
application of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.

PRICE WATERHOUSE LLP
New York, New York
November 15, 1994

B-37
<PAGE>

Prudential Mutual Funds
Supplement dated August 1, 1995

The following information supplements the Statement of Additional
Information of each of the Funds listed below.

MANAGER

Prudential Mutual Fund Management, Inc. (PMF or the Manager), the Manager of
the Fund, is a subsidiary of Prudential Securities Incorporated and The
Prudential Insurance Company of America (Prudential). PMF has three wholly-owned
subsidiaries: Prudential Mutual Fund Distributors, Inc., Prudential Mutual Fund
Services, Inc. (PMFS or the Transfer Agent) and Prudential Mutual Fund
Investment Management, Inc. PMFS serves as the transfer agent for the Prudential
Mutual Funds and, in addition, provides customer service, record keeping and
management and administration services to qualified plans.

Prudential is one of the largest diversified financial services institutions
in the world and, based on total assets, the largest insurance company in North
America as of December 31, 1994. Its primary business is to offer a full range
of products and services in three areas: insurance, investments and home
ownership for individuals and families; health-care management and other benefit
programs for employees of companies and members of groups; and asset management
for institutional clients and their associates. Prudential (together with its
subsidiaries) employs nearly 100,000 persons worldwide, and maintains a sales
force of approximately 19,000 agents, 3,400 insurance brokers and 6,000
financial advisors. It insures or provides other financial services to more than
50 million people worldwide. Prudential is a major issuer of annuities,
including variable annuities. Prudential seeks to develop innovative products
and services to meet consumer needs in each of its business areas.

Investment advisory services are provided to the Fund by a unit of The
Prudential Investment Corporation (PIC or the Subadviser), a subsidiary of
Prudential.

From time to time, there may be media coverage of portfolio managers and
other investment professionals associated with the Manager and the Subadviser in
national and regional publications, on television and in other media.
Additionally, individual mutual fund portfolios are frequently cited in surveys
conducted by national and regional publications and media organizations such as
The Wall Street Journal, The New York Times, Barron's and USA Today.

SHAREHOLDER INVESTMENT ACCOUNT

Mutual Fund Programs

From time to time, the Fund (or a portfolio of the Fund, if applicable) may
be included in a mutual fund program with other Prudential Mutual Funds. Under
such a program, a group of portfolios will be selected and thereafter promoted
collectively. Typically, these programs are created with an investment theme,
e.g., to seek greater diversification, protection from interest rate movements
or access to different management styles. In the event such a program is
instituted, there may be a minimum investment requirement for the program as a
whole. The Fund may waive or reduce the minimum initial investment requirements
in connection with such a program.

The mutual funds in the program may be purchased individually or as a part
of the program. Since the allocation of portfolios included in the program may
not be appropriate for all investors, investors should consult their Prudential
Securities Financial Advisor or Prudential/Pruco Securities Representative
concerning the appropriate blend of portfolios for them. If investors elect to
purchase the individual mutual funds that constitute the program in an
investment ratio different from that offered by the program, the standard
minimum investment requirements for the individual mutual funds will apply.

<PAGE>

APPENDIX--GENERAL INVESTMENT INFORMATION

The following terms are used in mutual fund investing.

Asset Allocation

Asset allocation is a technique for reducing risk, providing balance. Asset
allocation among different types of securities within an overall investment
portfolio helps to reduce risk and to potentially provide stable returns, while
enabling investors to work toward their financial goal(s). Asset allocation is
also a strategy to gain exposure to better performing asset classes while
maintaining investment in other asset classes.

Diversification

Diversification is a time-honored technique for reducing risk, providing
"balance" to an overall portfolio and potentially achieving more stable
returns. Owning a portfolio of securities mitigates the individual risks (and
returns) of any one security. Additionally, diversification among types of
securities reduces the risks and (general returns) of any one type of security.

Duration

Debt securities have varying levels of sensitivity to interest rates. As
interest rates fluctuate, the value of a bond (or a bond portfolio) will
increase or decrease. Longer term bonds are generally more sensitive to changes
in interest rates. When interest rates fall, bond prices generally rise.
Conversely, when interest rates rise, bond prices generally fall.

Duration is an approximation of the price sensitivity of a bond (or a bond
portfolio) to interest rate changes. It measures the weighted average maturity
of a bond's (or a bond portfolio's) cash flows, i.e., principal and interest
rate payments. Duration is expressed as a measure of time in years--the longer
the duration of a bond (or a bond portfolio), the greater the impact of interest
rate changes on the bond's (or the bond portfolio's) price. Duration differs
from effective maturity in that duration takes into account call provisions,
coupon rates and other factors. Duration measures interest rate risk only and
not other risks, such as credit risk and, in the case of non-U.S. dollar
denominated securities, currency risk. Effective maturity measures the final
maturity dates of a bond (or a bond portfolio).

Market Timing

Market timing--buying securities when prices are low and selling them when
prices are relatively higher--may not work for many investors because it is
impossible to predict with certainty how the price of a security will fluctuate.
However, owning a security for a long period of time may help investors offset
short-term price volatility and realize positive returns.

Power of Compounding

Over time, the compounding of returns can significantly impact investment
returns. Compounding is the effect of continuous investment on long-term
investment results, by which the proceeds of capital appreciation (and income
distributions, if elected) are reinvested to contribute to the overall growth of
assets. The long-term investment results of compounding may be greater than that
of an equivalent initial investment in which the proceeds of capital
appreciation and income distributions are taken in cash.

<PAGE>

APPENDIX--PORTFOLIO MANAGERS

The following information supplements only the Statement of Additional
Information of the captioned Fund.

Prudential Allocation Fund (Conservative Portfolio)
Prudential Multi-Sector Fund, Inc.

Gregory Goldberg, serves as the portfolio manager of Prudential Multi-Sector
Fund, Inc. and Prudential Allocation Fund (Conservative Portfolio). In making
equity investments, Mr. Goldberg generally focuses on stocks with a potential
for capital appreciation. He utilizes a ``bottom-up'' approach, selecting stocks
that, in his opinion, have strong fundamentals regardless of industry
performance. He evaluates a company's earnings and balance sheet to find
companies that, in his view, are leaders in their fields and have strong growth
potential. With respect to fixed-income securities, Mr. Goldberg generally
focuses on issues with a potential for total return, selecting securities that,
in his opinion, compare favorably in terms of price and yield relative to
maturity.

Prudential Equity Fund, Inc.

Thomas R. Jackson, has served as the portfolio manager of Prudential Equity
Fund, Inc. (the Fund) since 1990. He utilizes a ``value'' investing style in
managing the Fund. Value investing is a disciplined approach which attempts to
identify strong companies selling at a discount from their perceived true worth.
Mr. Jackson selects stocks for the Fund's portfolio at prices which in his view
are temporarily low relative to the company's earnings, assets, cash flow and
dividends. He may invest in out-of-favor companies as long as they meet his
strict criteria for value: financial soundness and low price relative to
earnings, book value and cash flow.

Prudential Equity Income Fund

Warren Spitz serves as the portfolio manager of Prudential Equity Income
Fund. He utilizes a ``value'' investing style in managing the Fund. Value
investing is a disciplined approach which attempts to identify strong companies
that are selling at a discount from their perceived true worth. Mr. Spitz seeks
to invest in companies that in his view have the potential to produce both
above-average earnings and dividend growth over the long term. These types of
companies are sometimes referred to as ``high dividend stocks.'' He seeks to
invest in securities at prices which in his view are temporarily low relative to
the company's earnings, assets, cash flow and dividends.

Prudential Global Fund, Inc.
Prudential Europe Growth Fund, Inc.
Prudential Pacific Growth Fund, Inc.

Daniel J. Duane, serves as the portfolio manger of Prudential Global Fund,
Inc., Prudential Global Genesis Fund, Inc., Prudential Europe Growth Fund, Inc.,
and Prudential Pacific Growth Fund, Inc. Consistent with the investment
objectives and policies of each Fund, Mr. Duane evaluates the economic climate
in various countries and focuses on growth-oriented global equity investments.
He seeks to identify long-term themes and changing economic conditions that, in
his opinion, will lead to earnings growth. His portfolio management style can be
referred to as ``bottom up'' in that his primary focus is on individual stocks.
He evaluates historical business trends in the United States when looking for
long-term investment opportunities abroad (the ``rear view mirror'' analysis).
In globally-diversified portfolios, the portfolio manager generally maintains
exposure to major world stock markets. Under normal market conditions, the
portfolio manager seeks to keep the portfolios fully invested. Mr. Duane
consults with a team of regional equity analysts who provide research on
existing holdings of each Fund and on potential acquisitions.

Prudential Utility Fund, Inc.

According to data provided by Lipper Analytical Services, Inc., Prudential
Utility Fund, Inc. (the Fund) is among the oldest and largest U.S. mutual funds
in the utility category of mutual funds. David Kiefer, CFA, serves as the
portfolio manager of the Fund and seeks to invest in a broad range of utilities
companies including electric, gas, gas pipeline, telephone communications, water
and cable companies from around the world. Historically, the Fund invested in
traditional types of utility companies--principally, electric, gas and telephone
companies. The portfolio manager seeks to invest in companies that have the
potential for above-average earnings and dividend growth over the long term and
considers such factors as cash flow in selecting portfolio securities.

<PAGE>

APPENDIX--HISTORICAL PERFORMANCE DATA

The historical performance data contained in this Appendix relies on data
obtained from statistical services, reports and other services believed by the
Manager to be reliable. The information has not been independently verified by
the Manager.

(CHART)

<PAGE>

(CHART)

<PAGE>

(CHART)

<PAGE>

(CHART)

<PAGE>

Listed below are the names of the Prudential Mutual Funds and the dates of
the Statements of Additional Information to which this supplement relates.

<TABLE>
<S> <C>
Name of Fund Statement Date
Prudential Allocation Fund September 29, 1994
Strategy Portfolio
Conservatively Managed Portfolio
Prudential Equity Fund, Inc. February 28, 1995
Prudential Equity Income Fund December 30, 1994
Prudential Europe Growth Fund, Inc. June 30, 1995
Prudential Global Fund, Inc. January 3, 1995
Prudential Growth Opportunity Fund, Inc. February 1, 1995
Prudential Multi-Sector Fund, Inc. June 30, 1995
Prudential Pacific Growth Fund, Inc. January 3, 1995
Prudential Utility Fund, Inc. March 1, 1995
</TABLE>

MF 950C-11

<PAGE>

Prudential Mutual Funds
Supplement dated September 29, 1995

The following information supplements the Statement of Additional Information of
each of the Funds listed below.

MANAGER

Prudential Mutual Fund Management, Inc. (PMF or the Manager) serves as the
manager of all of the investment companies that comprise the Prudential Mutual
Funds. As of August 31, 1995, assets of the Prudential Mutual Funds were
approximately $50 billion. The Prudential Investment Corporation (PIC) serves as
the investment adviser for each of the Funds listed below. The unit of PIC which
provides investment advisory services to the Funds is known as Prudential Mutual
Fund Investment Management.

Based on data for the year ended December 31, 1994 for the Prudential Mutual
Funds, on an average day, there are approximately $80 million in common stock
transactions, over $100 million in bond transactions and over $4.1 billion in
money market transactions. In 1994, the Prudential Mutual Funds effected more
than 57,000 trades in money market securities and held on average $21 billion of
money market securities. Based on complex-wide data for the year ended December
31, 1994, on an average day, 7,168 shareholders telephoned Prudential Mutual
Fund Services, Inc., the Transfer Agent of the Prudential Mutual Funds, on the
Prudential Mutual Funds' toll-free number. On an annual basis, that represents
approximately 1.8 million telephone calls and approximately 1.1 million fund
transactions.

PMF is a subsidiary of The Prudential Insurance Company of America
(Prudential), one of the largest diversified financial services institutions in
the world. For the year ended December 31, 1994, Prudential through its
subsidiaries provided financial services to more than 50 million people
worldwide --more than one of every five people in the United States. As of
December 31, 1994, Prudential through its subsidiaries provided automobile
insurance for more than 1.8 million cars and insured more than 1.5 million
homes. For the year ended December 31, 1994, The Prudential Bank, a subsidiary
of Prudential, served 940,000 customers in 50 states providing credit card
services and loans totaling more than $1.2 billion. Assets held by Prudential
Securities Incorporated (PSI) for its clients totaled approximately $150 billion
at December 31, 1994. During 1994, over 28,000 new customer accounts were opened
each month at PSI. The Prudential Real Estate Affiliates, the fourth largest
real estate brokerage network in the United States, has more than 34,000 brokers
and agents and more than 1,100 offices in the United States.

(over)

<PAGE>

Listed below are the names of the Prudential Mutual Funds and the dates of
the Statements of Additional Information to which this supplement relates.

<TABLE>
<CAPTION>
Name of Fund Statement Date
<S> <C>
Prudential Allocation Fund September 29, 1995
Strategy Portfolio
Balanced Portfolio
Prudential California Municipal Fund
California Income Series December 30, 1994
California Series December 30, 1994
Prudential Diversified Bond Fund, Inc. January 3, 1995
Prudential Equity Fund, Inc. February 28, 1995
Prudential Equity Income Fund December 30, 1994
Prudential Europe Growth Fund, Inc. June 30, 1995
Prudential Global Fund, Inc. January 3, 1995
Prudential Global Genesis Fund, Inc. July 31, 1995
Prudential Global Natural Resources Fund, Inc. July 31, 1995
Prudential Government Income Fund, Inc. May 1, 1995
Prudential Government Securities Trust
Short-Intermediate Term Series August 1, 1995
Prudential Growth Opportunity Fund, Inc. February 1, 1995
Prudential High Yield Fund, Inc. February 28, 1995
Prudential Intermediate Global Income Fund, Inc. March 2, 1995
Prudential Mortgage Income Fund, Inc. August 25, 1995
Prudential Multi-Sector Fund, Inc. June 30, 1995
Prudential Municipal Bond Fund June 30, 1995
Insured Series
High Yield Series
Intermediate Series
Prudential Municipal Series Fund
Arizona Series December 30, 1994
Florida Series December 30, 1994
Georgia Series December 30, 1994
Hawaii Income Series March 30, 1995
Maryland Series December 30, 1994
Massachusetts Series December 30, 1994
Michigan Series December 30, 1994
Minnesota Series December 30, 1994
New Jersey Series December 30, 1994
New York Series December 30, 1994
North Carolina Series December 30, 1994
Ohio Series December 30, 1994
Pennsylvania Series December 30, 1994
Prudential National Municipals Fund, Inc. February 28, 1995
Prudential Pacific Growth Fund, Inc. January 3, 1995
Prudential Short Term Global Income Fund, Inc.
Global Assets Portfolio January 3, 1995
Short-Term Global Income Portfolio January 3, 1995
Prudential Structured Maturity Fund, Inc. March 1, 1995
Income Portfolio
Prudential U. S. Government Fund January 3, 1995
Prudential Utility Fund, Inc. March 1, 1995
</TABLE>

MF950C-14

<PAGE>
PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(A) FINANCIAL STATEMENTS:

(1) The Financial Statements in Parts A and B, as applicable, to this
Post-Effective Amendment to the Registration Statement on Form N-1A
(File No. 2-68723).

Financial Highlights for the ten year period ended September 30, 1994
and six months ended March 31, 1995 (unaudited) (Part A).

Portfolio of Investments at September 30, 1994 and March 31, 1995
(unaudited) (Part B).

Statement of Assets and Liabilities at September 30, 1994 and March 31,
1995 (unaudited) (Part B).

Statement of Operations for the year ended September 30, 1994 and six
months ended March 31, 1995 (unaudited) (Part B).

Statement of Changes in Net Assets for the year 1994 and six months
ended March 31, 1995 (unaudited) (Part B).

Notes to Financial Statements (Part B).

Financial Highlights for each of the five years ended September 30, 1994
and six months ended March 31, 1995 (unaudited) (Part B).

Report of Independent Accountants (Part B).

(B) EXHIBITS:

1. (a) Amended and Restated Articles of Incorporation. Incorporated by
reference to Exhibit 1(e) to Post-Effective Amendment No. 17 to the
Registration Statement filed on Form N-1A via EDGAR on November 29, 1993
(File No. 2-68723).

(b) Articles of Amendment. Incorporated by reference to Exhibit 1(b) to
Post-Effective Amendment No. 20 to the Registration Statement filed on
Form N-1A via EDGAR on November 29, 1994 (File No. 2-68723).

2. Amended and Restated By-Laws. Incorporated by reference to Exhibit 2(d)
to Post-Effective Amendment No. 17 to the Registration Statement on Form
N-1A via EDGAR filed on November 29, 1993 (File No. 2-68723).

4. Instruments defining rights of holders of the securities being offered.
Incorporated by reference to Exhibit 4(c) to Post-Effective Amendment No.
17 to the Registration Statement filed on Form N-1A via EDGAR filed on
November 29, 1993 (File No. 2-68723).

5. (a) Management Agreement between the Registrant and Prudential Mutual
Fund Management Inc. Incorporated by reference to Exhibit No. 5(a) to
Post-Effective Amendment No. 13 to the Registration Statement on Form
N-1A (File No. 2-68723).

(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation, incorporated by reference
to Exhibit No. 5(b) to Post-Effective Amendment No. 13 to the
Registration Statement on Form N-1A (File No. 2-68723).

6. (a) Distribution Agreement for Class A shares. Incorporated by reference
to Exhibit 6(a) to Post-Effective Amendment No. 20 to the Registration
Statement filed on Form N-1A via EDGAR on November 29, 1994 (File No.
2-68723).

(b) Distribution Agreement for Class B shares. Incorporated by reference
to Exhibit 6(b) to Post-Effective Amendment No. 20 to the Registration
Statement filed on Form N-1A via EDGAR on November 29, 1994 (File No.
2-68723).

(c) Distribution Agreement for Class C shares. Incorporated by reference
to Exhibit 6(c) to Post-Effective Amendment No. 20 to the Registration
Statement filed on Form N-1A via EDGAR on November 29, 1994 (File No.
2-68723).

(d) Form of Distribution Agreement for Class Z shares.*

C-1
<PAGE>
8. Custodian Agreement between the Registrant and State Street Bank and
Trust Company. Incorporated by reference to Exhibit No. 8(b) to
Post-Effective Amendment 14 to the Registration Statement on Form N-1A
(File No. 2-68723).

9. Transfer Agency Agreement between the Registrant and Prudential Mutual
Fund Services, Inc., dated January 1, 1988. Incorporated by reference to
Exhibit No. 9 to Post-Effective Amendment No. 10 to the Registration
Statement on Form N-1A (File No. 2-68723).

10. Opinion of Sullivan & Cromwell. Incorporated by reference to Exhibit No.
10 to Post-Effective Amendment No. 1 to the Registration Statement on
Form N-1A (File No. 2-68723).

11. Consent of Independent Accountants.*

13. Purchase Agreement. Incorporated by reference to Exhibit No. 13 to
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
(File No. 2-68723).

15. (a) Distribution and Service Plan for Class A shares. Incorporated by
reference to Exhibit 15(a) to Post-Effective Amendment No. 20 to the
Registration Statement filed on Form N-1A via EDGAR on November 29, 1994
(File No. 2-68723).

(b) Distribution and Service Plan for Class B shares. Incorporated by
reference to Exhibit 15(b) to Post-Effective Amendment No. 20 to the
Registration Statement filed on Form N-1A via EDGAR on November 29, 1994
(File No. 2-68723).

(c) Distribution and Service Plan for Class C shares. Incorporated by
reference to Exhibit 15(c) to Post-Effective Amendment No. 20 to the
Registration Statement filed on Form N-1A via EDGAR on November 29, 1994
(File No. 2-68723).

16. (a) Schedule of Computation of Performance Quotations. Incorporated by
reference to Exhibit No. 16 to Post-Effective Amendment No. 13 to
Registration Statement on Form N-1A (File No. 2-68723).

(b) Schedule of Computation of 30-day yield. Incorporated by reference
to Exhibit No. 16(b) to Post-Effective Amendment 17 to the Registration
Statement on Form N-1A via EDGAR filed on November 29, 1993 (File No.
2-68723).

17. Financial Data Schedule.*

18. Rule 18f-3 Plan.*

- ------------------------
*Filed herewith.

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

As of September 22, 1994 there were 32,839, 52,580 and 412 record holders of
Class A, Class B and Class C common stock, $.01 par value per share, of the
Registrant, respectively.

ITEM 27. INDEMNIFICATION.

As permitted by Sections 17(h) and (i) of the Investment Company Act of 1940
(the 1940 Act) and pursuant to Article VI of the Fund's By-Laws (Exhibit 2 to
the Registration Statement), officers, directors, employees and agents of the
Registrant will not be liable to the Registrant, any stockholder, officer,
director, employee, agent or other person for any action or failure to act,
except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
Section 2-418 of Maryland

C-2
<PAGE>
General Corporation Law permits indemnification of directors who acted in good
faith and reasonably believed that the conduct was in the best interests of the
Registrant. As permitted by Section 17(i) of the 1940 Act, pursuant to Section
10 of each Distribution Agreement (Exhibits 6(b) and (c) to the Registration
Statement), each Distributor of the Registrant may be indemnified against
liabilities which it may incur, except liabilities arising from bad faith, gross
negligence, willful misfeasance or reckless disregard of duties.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (Securities Act) may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1940 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in connection with the successful defense of any
action, suit or proceeding) is asserted against the Registrant by such director,
officer or controlling person in connection with the shares being registered,
the Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the 1940 Act and will be governed by the final adjudication of such
issue.

The Registrant has purchased an insurance policy insuring its officers and
directors against liabilities, and certain costs of defending claims against
such officers and directors, to the extent such officers and directors are not
found to have committed conduct constituting willful misfeasance, bad faith,
gross negligence or reckless disregard in the performance of their duties. The
insurance policy also insures the Registrant against the cost of indemnification
payments to officers and directors under certain circumstances.

Section 9 of the Management Agreement (Exhibit 5(a) to the Registration
Statement) and Section 4 of the Subadvisory Agreement (Exhibit 5(b) to the
Registration Statement) limit the liability of Prudential Mutual Fund
Management, Inc. (PMF) and The Prudential Investment Corporation (PIC),
respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective duties or from reckless
disregard by them of their respective obligations and duties under the
agreements.

The Registrant hereby undertakes that it will apply the indemnification
provisions of its By-Laws and each Distribution Agreement in a manner consistent
with Release No. 11330 of the Securities and Exchange Commission under the 1940
Act so long as the interpretation of Sections 17(h) and 17(i) of such Act remain
in effect and are consistently applied.

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

(a) Prudential Mutual Fund Management, Inc.

See "How the Fund is Managed" in the Prospectus constituting Part A of this
Registration Statement and "Manager" in the Statement of Additional Information
constituting Part B of this Registration Statement.

The business and other connections of the officers of PMF are listed in
Schedules A and D of Form ADV of PMF as currently on file with the Securities
and Exchange Commission, the text of which is hereby incorporated by reference
(File No. 801-31104, filed in March 30, 1995).

C-3
<PAGE>
The business and other connections of PMF's directors and principal
executive officers are set forth below. Except as otherwise indicated, the
address of each person is One Seaport Plaza, New York, NY 10292.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PMF PRINCIPAL OCCUPATIONS
- ------------------------- --------------------- ----------------------------------------------------------------
<S> <C> <C>
Brendan D. Boyle Executive Vice Executive Vice President, Director of Marketing and Director,
President, Director PMF; Senior Vice President, Prudential Securities Incorporated
of Marketing and (Prudential Securities); Chairman and Director, Prudential
Director Mutual Fund Distributors, Inc. (PMFD)
Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice President, Prudential
Securities; Vice President, PMFD
Frank W. Giordano Executive Vice Executive Vice President, General Counsel, Secretary and
President, General Director, PMF and PMFD; Senior Vice President, Prudential
Counsel, Secretary Securities; Director, Prudential Mutual Fund Services, Inc.
and Director (PMFS)
Robert F. Gunia Executive Vice Executive Vice President, Chief Financial and Administrative
President, Chief Officer, Treasurer and Director, PMF; Senior Vice President,
Financial and Prudential Securities; Executive Vice President, Chief
Administrative Financial Officer, Treasurer and Director, PMFD; Director,
Officer, Treasurer PMFS
and Director
Theresa A. Hamacher Director Director, PMF; Vice President, Prudential; Vice President,
Prudential Investment Corporation (PIC)
Timothy J. O'Brien Director President, Chief Executive Officer, Chief Operating Officer and
Director, PMFD; Chief Executive Officer and Director, PMFS;
Director, PMF
Richard A. Redeker President, Chief President, Chief Executive Officer and Director, PMF; Executive
Executive Officer and Vice President, Director and Member of the Operating
Director Committee, Prudential Securities; Director, Prudential
Securities Group, Inc. (PSG); Executive Vice President, PIC;
Director, PMFD; Director, PMFS; Director, PMF
S. Jane Rose Senior Vice Senior Vice President, Senior Counsel and Assistant Secretary,
President, Senior PMF; Senior Vice President and Senior Counsel, Prudential
Counsel and Assistant Securities
Secretary
</TABLE>

(b) The Prudential Investment Corporation (PIC)

See "How the Fund is Managed--Subadviser" in the Prospectus constituting
Part A of this Registration Statement and "Subadviser" in the Statement of
Additional Information constituting Part B of this Registration Statement.

The business and other connections of PIC's directors and executive officers
are as set forth below. Except as otherwise indicated, the address of each
person is Prudential Plaza, Newark, NJ 07102.

<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
- ------------------------- --------------------- ----------------------------------------------------------------
<S> <C> <C>
William M. Bethke Senior Vice President Senior Vice President, Prudential; Senior Vice President, PIC
Two Gateway Center
Newark, NJ 07102
John D. Brookmeyer, Jr. Senior Vice President Senior Vice President, Prudential; Senior Vice President and
51 JFK Parkway and Director Director, PIC
Short Hills, NJ 07078
</TABLE>

C-4
<PAGE>
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
- ------------------------- --------------------- ----------------------------------------------------------------
<S> <C> <C>
Barry M. Gillman Director Director, PIC

Theresa A. Hamacher Vice President Vice President, Prudential; Vice President, PIC; Director, PMF

Harry E. Knapp, Jr. President, Chairman President, Chairman of the Board, Chief Executive Officer and
of the Board, Chief Director, PIC; Vice President, Prudential
Executive Officer and
Director

William P. Link Senior Vice President Executive Vice President, Prudential; Senior Vice President, PIC
Four Gateway Center
Newark, NJ 07102

Richard A. Redeker Executive Vice President, Chief Executive Officer and Director, PMF; Executive
One Seaport Plaza President Vice President, Director and Member of the Operating
New York, NY 10292 Committee, Prudential Securities; Director, PSG; Executive
Vice President, PIC; Director, PMFD; Director, PMFS

Eric A. Simonson Vice President and Vice President and Director, PIC; Executive Vice President,
Director Prudential

Claude J. Zinngrabe, Jr. Executive Vice Vice President, Prudential; Executive Vice President, PIC
President
</TABLE>

ITEM 29. PRINCIPAL UNDERWRITERS.

(a)(i) Prudential Securities Incorporated

Prudential Securities is distributor for Prudential Government Securities
Trust (Intermediate Term Series), Prudential Jennison Fund, Inc., The Target
Portfolio Trust, for Class B shares of Prudential Adjustable Rate Securities
Fund, Inc., for Class B and Class C shares of Prudential Allocation Fund,
Prudential California Municipal Fund (California Income Series and California
Series), Prudential Diversified Bond Fund, Inc., Prudential Equity Fund, Inc.,
Prudential Equity Income Fund, Prudential Europe Growth Fund, Inc., Prudential
Global Fund, Inc., Prudential Global Genesis Fund, Inc., Prudential Global
Natural Resources Fund, Inc., Prudential Government Income Fund, Inc.,
Prudential Growth Opportunity Fund, Inc., Prudential Mortgage Income Fund, Inc.,
Prudential High Yield Fund, Inc., Prudential Intermediate Global Income Fund,
Inc., Prudential Multi-Sector Fund, Inc., Prudential Municipal Bond Fund,
Prudential Municipal Series Fund (except New York Money Market Series,
Connecticut Money Market Series, Massachusetts Money Market Series and New
Jersey Money Market Series), Prudential National Municipals Fund, Inc.,
Prudential Pacific Growth Fund, Inc., Prudential Global Limited Maturity Fund,
Inc., Prudential Structured Maturity Fund, Inc., Prudential U.S. Government
Fund, Prudential Utility Fund, Inc., Global Utility Fund, Inc.,
Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund) and The
BlackRock Government Income Trust. Prudential Securities is also a depositor for
the following unit investment trusts:

Corporate Investment Trust Fund
Prudential Equity Trust Shares
National Equity Trust
Prudential Unit Trusts
Government Securities Equity Trust
National Municipal Trust

C-5
<PAGE>
(ii) Prudential Mutual Fund Distributors, Inc.

Prudential Mutual Fund Distributors, Incorporated is distributor for Command
Government Fund, Command Money Fund, Command Tax-Free Fund, Prudential
California Municipal Fund (California Money Market Series), Prudential
Institutional Liquidity Portfolio, Prudential Intermediate Global Income Fund,
Inc., Prudential-Bache Special Money Market Fund, Inc. (d/b/a Prudential Special
Money Market Fund), Prudential Structured Maturity Fund, Inc., Prudential
Tax-Free Money Fund, Inc., and for Class A shares of Prudential Adjustable Rate
Securities Fund, Inc., Prudential Allocation Fund, Prudential California
Municipal Fund (California Income Series and California Series), Prudential
Diversified Bond Fund, Inc., Prudential Equity Fund, Inc., Prudential Equity
Income Fund, Prudential Europe Growth Fund, Inc., Prudential Global Fund, Inc.,
Prudential Global Genesis Fund, Inc., Prudential Global Natural Resources Fund,
Inc., Prudential Government Income Fund, Inc., Prudential Government Securities
Trust (Money Market Series and U.S. Treasury Money Market Series), Prudential
Growth Opportunity Fund, Inc., Prudential High Yield Fund, Inc., Prudential
Intermediate Global Income Fund, Inc., Prudential-Bache MoneyMart Assets Inc.
(d/b/a Prudential MoneyMart Assets Fund), Prudential Mortgage Income Fund, Inc.,
Prudential Multi-Sector Fund, Inc., Prudential Municipal Bond Fund, Prudential
Municipal Series Fund (Connecticut Money Market Series, Massachusetts Money
Market Series and New York Money Market Series and New Jersey Money Market
Series), Prudential National Municipals Fund, Inc., Prudential Pacific Growth
Fund, Inc., Prudential Global Limited Maturity Fund, Inc., Prudential Structured
Maturity Fund, Prudential U.S. Government Fund, Prudential Utility Fund, Inc.,
Global Utility Fund, Inc., Nicholas-Applegate Fund, Inc. (Nicholas-Applegate
Growth Equity Fund) and The BlackRock Government Income Trust.

(b)(i) Information concerning the officers and directors of Prudential
Securities Incorporated is set forth below.

<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME* UNDERWRITER REGISTRANT
- ------------------------------ ----------------------------------------------------------------------- --------------
<S> <C> <C>
Robert Golden................. Executive Vice President and Director None
One New York Plaza
New York, NY
Alan D. Hogan................. Executive Vice President, Chief Administrative Officer and Director None
George A. Murray.............. Executive Vice President and Director None
Leland B. Paton............... Executive Vice President and Director None
One New York Plaza
New York, NY
Vincent T. Pica, II........... Executive Vice President and Director None
One New York Plaza
New York, NY
Richard A. Redeker............ Executive Vice President and Director President and
Director
Gregory W. Scott.............. Executive Vice President, Chief Financial Officer and Director None
Hardwick Simmons.............. Chief Executive Officer, President and Director None
Lee B. Spencer................ General Counsel, Executive Vice President, Secretary and Director None
<FN>
- ------------------------
* The address of each person named in One Seaport Plaza, New York, NY 10292
</TABLE>

(ii) Information concerning the officers and directors of Prudential Mutual
Fund Distributors, Inc. is set forth below.

<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME (1) UNDERWRITER REGISTRANT
- ------------------------------ ----------------------------------------------------------------------- --------------
<S> <C> <C>
Joanne Accurso-Soto........... Vice President None
Dennis N. Annarumma........... Vice President, Assistant Treasurer and Assistant Comptroller None
Phyllis J. Berman............. Vice President None
Brendan D. Boyle.............. Chairman and Director None
Stephen P. Fisher............. Vice President None
</TABLE>

C-6
<PAGE>
<TABLE>
<CAPTION>
POSITIONS AND POSITIONS AND
OFFICES WITH OFFICES WITH
NAME (1) UNDERWRITER REGISTRANT
- ------------------------------ ----------------------------------------------------------------------- --------------
<S> <C> <C>
Frank W. Giordano............. Executive Vice President, General Counsel, Secretary and Director None
Robert F. Gunia............... Executive Vice President, Chief Financial Officer, Treasurer and Vice President
Director
Timothy J. O'Brien............ President, Chief Executive Officer, Chief Operating Officer and None
Director
Richard A. Redeker............ Director Director and
President
Andrew J. Varley.............. Vice President None
Anita L. Whelan............... Vice President and Assistant Secretary None
<FN>
- ------------------------
(1) The address of each person named is One Seaport Plaza, New York, NY 10292
unless otherwise indicated.
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules thereunder are maintained at the offices of
State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171, The Prudential Investment Corporation, Prudential Plaza,
745 Broad Street, Newark, New Jersey 07102, the Registrant, One Seaport Plaza,
New York, New York 10292, and Prudential Mutual Fund Services, Inc., Raritan
Plaza One, Edison, New Jersey 08837. Documents required by Rules 31a-1(b)(5),
(6), (7), (9), (10) and (11) and 31a-1(f) will be kept at Three Gateway Center,
documents required by Rules 31a-1(b)(4) and (11) and 31a-1(d) at One Seaport
Plaza and the remaining accounts, books and other documents required by such
other pertinent provisions of Section 31(a) and the Rules promulgated thereunder
will be kept by State Street Bank and Trust Company and Prudential Mutual Fund
Services, Inc.

ITEM 31. MANAGEMENT SERVICES.

Other than as set forth under the captions "How the Fund is
Managed--Manager" and "How the Fund is Managed-- Distributor" in the Prospectus
and the captions "Manager" and "Distributor" in the Statement of Additional
Information, constituting Parts A and B, respectively, of this Registration
Statement, Registrant is not a party to any management-related service contract.

ITEM 32. UNDERTAKINGS.

The Registrant hereby undertakes to furnish each person to whom a Prospectus
is delivered with a copy of Registrant's latest annual report to shareholders
upon request and without charge.

C-7
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this
Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York, on the 18th day of October, 1995.

PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.

/s/ Richard A. Redeker
---------------------------------------------------------------------------
(RICHARD A. REDEKER, PRESIDENT)

Pursuant to the requirements of the Securities Act of 1933, this
Post-Effective Amendment to the Registration Statement has been signed below by
the following persons in the capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ --------------------------------------------

<S> <C> <C>
/s/ Richard A. Redeker President and Director October 18, 1995
- ------------------------------------
RICHARD A. REDEKER

/s/ Delayne Dedrick Gold Director October 18, 1995
- ------------------------------------
DELAYNE DEDRICK GOLD

/s/ Arthur Hauspurg Director October 18, 1995
- ------------------------------------
ARTHUR HAUSPURG

/s/ Harry A. Jacobs, Jr. Director October 18, 1995
- ------------------------------------
HARRY A. JACOBS, JR.

/s/ Stephen P. Munn Director October 18, 1995
- ------------------------------------
STEPHEN P. MUNN

/s/ Louis A. Weil, III Director October 18, 1995
- ------------------------------------
LOUIS A. WEIL, III

/s/ Eugene S. Stark Treasurer and Principal October 18, 1995
- ------------------------------------ Financial and Accounting
EUGENE S. STARK Officer
</TABLE>
<PAGE>
EXHIBIT INDEX

(B) EXHIBITS:

2. Amended and Restated By-Laws. Incorporated by reference to Exhibit 2(d)
to Post-Effective Amendment No. 17 to Registration Statement on Form N-1A
via EDGAR filed on November 29, 1993 (File No. 2-68723).

(d) Form of Distribution Agreement for Class Z shares.*

8. (a) Custodian Contract between the Registrant and State Street Bank and
Trust Company, dated July 13, 1984, incorporated by reference to Exhibit
No. 8 to Post-Effective Amendment No. 6 to the Registration Statement on
Form N-1A (File No. 2-68723).

(b) Amended Custodian Agreement between the Registrant and State Street
Bank and Trust Company. Incorporated by reference to Exhibit No. 8(b) to
Post-Effective Amendment 14 to the Registration Statement on Form N-1A
(File No. 2-68723).

10. Opinion of Sullivan & Cromwell. Incorporated by reference to Exhibit No.
10 to Post-Effective Amendment No. 1 to the Registration Statement on
Form N-1A (File No. 2-68723).

11. Consent of Independent Accountants.*

13. Purchase Agreement. Incorporated by reference to Exhibit No. 13 to
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
(File No. 2-68723).
<PAGE>
15. (a) Distribution and Service Plan for Class A shares. Incorporated by
reference to Exhibit 15(a) to Post-Effective Amendment No. 20 to the
Registration Statement filed on Form N-1A via EDGAR on November 29, 1994
(File No. 2-68723).

16. (a) Schedule of Computation of Performance Quotations. Incorporated by
reference to Exhibit No. 16 to Post-Effective Amendment No. 13 to
Registration Statement on Form N-1A (File No. 2-68723).

17. Financial Data Schedule.*

18. Rule 18f-3 Plan.*
- ------------------------
*Filed herewith.

<PAGE>

EXHIBIT 6(d)

Prudential Growth Opportunity Fund, Inc.(the Fund)
Form of
Distribution Agreement
(Class Z Shares)
----------------

Agreement made as of _______, 1995, between Prudential Growth
Opportunity Fund, Inc., a Maryland Corporation (the Fund) and Prudential
Securities Incorporated, a Delaware Corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the Investment Company Act), as a diversified, open-end,
management investment company and it is in the interest of the Fund to offer its
Class Z shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business of
selling shares of registered investment companies either directly or through
other broker-dealers; and

WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other, with respect to the continuous offering of the Fund's Class Z
shares from and after the date hereof in order to promote the growth of the Fund
and facilitate the distribution of its Class Z shares.

NOW, THEREFORE, the parties agree as follows:

Section 1. APPOINTMENT OF THE DISTRIBUTOR

The Fund hereby appoints the Distributor as the principal underwriter
and distributor of the Class Z shares of the Fund to sell Class Z shares to the
public on behalf of the Fund and the Distributor hereby accepts such appointment
and agrees to act hereunder. The Fund hereby agrees during the term of this
Agreement to sell Class Z shares of the Fund through the Distributor on the
terms and conditions set forth below.

Section 2. EXCLUSIVE NATURE OF DUTIES

The Distributor shall be the exclusive representative of the Fund to
act as principal underwriter and distributor of the Fund's Class Z shares,
except that:

2.1 The exclusive rights granted to the Distributor to sell Class Z
shares of the Fund shall not apply to Class Z shares of the Fund issued in
connection with the merger or consolidation of any other investment company or
personal holding company with the Fund or the acquisition by purchase or
otherwise of all (or substantially all) of the assets or the outstanding shares
of any such company by the Fund.

<PAGE>

2.2 Such exclusive rights shall not apply to Class Z shares issued by
the Fund pursuant to reinvestment of dividends or capital gains distributions.

2.3 Such exclusive rights shall not apply to Class Z shares issued by
the Fund pursuant to the reinstatement privilege afforded redeeming
shareholders.

2.4 Such exclusive rights shall not apply to purchases made through
the Fund's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Fund. The term "Prospectus" shall mean
the Prospectus and Statement of Additional Information included as part of the
Fund's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended (the Securities Act), and the Investment Company Act, as
such Registration Statement is amended from time to time.

Section 3. PURCHASE OF CLASS Z SHARES FROM THE FUND

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Class Z shares needed, but not more than the Class Z
shares needed (except for clerical errors in transmission) to fill unconditional
orders for Class Z shares placed with the Distributor by investors or registered
and qualified securities dealers and other financial institutions (selected
dealers).

3.2 The Class Z shares shall be sold by the Distributor on behalf of
the Fund and delivered by the Distributor or selected dealers, as described in
Section 6.4 hereof, to investors at the offering price as set forth in the
Prospectus.

3.3 The Fund shall have the right to suspend the sale of its Class Z
shares at times when redemption is suspended pursuant to the conditions in
Section 4.3 hereof or at such other times as may be determined by the Board of
Directors. The Fund shall also have the right to suspend the sale of its Class
Z shares if a banking moratorium shall have been declared by federal or New York
authorities.

3.4 The Fund, or any agent of the Fund designated in writing by the
Fund, shall be promptly advised of all purchase orders for Class Z shares
received by the Distributor. Any order may be rejected by the Fund; provided,
however, that the Fund will not arbitrarily or without reasonable cause refuse
to accept or confirm orders for the purchase of Class Z shares. The Fund (or
its agent) will confirm orders upon their receipt, will make appropriate book
entries and upon receipt by the Fund (or its agent) of payment therefor, will
deliver deposit receipts for such Class Z shares pursuant to the instructions of
the Distributor.

2
<PAGE>

Payment shall be made to the Fund in New York Clearing House funds or federal
funds. The Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Fund (or its agent).

Section 4. REPURCHASE OR REDEMPTION OF CLASS Z SHARES BY THE FUND

4.1 Any of the outstanding Class Z shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the Class Z
shares so tendered in accordance with its Articles of Incorporation as amended
from time to time, and in accordance with the applicable provisions of the
Prospectus. The price to be paid to redeem or repurchase the Class Z shares
shall be equal to the net asset value determined as set forth in the Prospectus.
All payments by the Fund hereunder shall be made in the manner set forth in
Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
on or before the seventh day subsequent to its having received the notice of
redemption in proper form. The proceeds of any redemption of Class Z shares
shall be paid by the Fund to or for the account of the redeeming shareholder, in
each case in accordance with applicable provisions of the Prospectus.

4.3 Redemption of Class Z shares or payment may be suspended at times
when the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or during any other period when the
Securities and Exchange Commission, by order, so permits.

Section 5. DUTIES OF THE FUND

5.1 Subject to the possible suspension of the sale of Class Z shares
as provided herein, the Fund agrees to sell its Class Z shares so long as it has
Class Z shares available.

5.2 The Fund shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Class Z shares, and this
shall include one certified copy, upon request by the Distributor, of all
financial statements examined for the Fund by independent public accountants.
The Fund shall make available to the Distributor such number of copies of its
Prospectus and annual and interim reports as the Distributor shall reasonably
request.

3
<PAGE>

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Directors and the shareholders, all necessary
action to fix the number of authorized Class Z shares and such steps as may be
necessary to register the same under the Securities Act, to the end that there
will be available for sale such number of Class Z shares as the Distributor
reasonably may expect to sell. The Fund agrees to file from time to time such
amendments, reports and other documents as may be necessary in order that there
will be no untrue statement of a material fact in the Registration Statement, or
necessary in order that there will be no omission to state a material fact in
the Registration Statement which omission would make the statements therein
misleading.

5.4 The Fund shall use its best efforts to qualify and maintain the
qualification of any appropriate number of its Class Z shares for sales under
the securities laws of such states as the Distributor and the Fund may approve;
provided that the Fund shall not be required to amend its Articles of
Incorporation or By-Laws to comply with the laws of any state, to maintain an
office in any state, to change the terms of the offering of its Class Z shares
in any state from the terms set forth in its Registration Statement, to qualify
as a foreign corporation in any state or to consent to service of process in any
state other than with respect to claims arising out of the offering of its Class
Z shares. Any such qualification may be withheld, terminated or withdrawn by
the Fund at any time in its discretion. As provided in Section 7.1 hereof, the
expense of qualification and maintenance of qualification shall be borne by the
Fund. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund in
connection with such qualifications.

Section 6. DUTIES OF THE DISTRIBUTOR

6.1 The Distributor shall devote reasonable time and effort to effect
sales of Class Z shares of the Fund, but shall not be obligated to sell any
specific number of Class Z shares. Sales of the Class Z shares shall be on the
terms described in the Prospectus. The Distributor may enter into like
arrangements with other investment companies. The Distributor shall compensate
the selected dealers as set forth in the Prospectus.

6.2 In selling the Class Z shares, the Distributor shall use its best
efforts in all respects duly to conform with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any selected dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Fund.

4
<PAGE>

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with the
requirements of the National Association of Securities Dealers, Inc. (NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and other
financial institutions of its choice for the sale of Class Z shares, provided
that the Fund shall approve the forms of such agreements. Within the United
States, the Distributor shall offer and sell Class Z shares only to such
selected dealers as are members in good standing of the NASD. Class Z shares
sold to selected dealers shall be for resale by such dealers only at the
offering price determined as set forth in the Prospectus.

Section 7. ALLOCATION OF EXPENSES

7.1 The Fund shall bear all costs and expenses of the continuous
offering of its Class Z shares, including fees and disbursements of its counsel
and auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and preparing and mailing annual and periodic reports and
proxy materials to shareholders (including but not limited to the expense of
setting in type any such Registration Statements, Prospectuses, annual or
periodic reports or proxy materials). The Fund shall also bear the cost of and
expense of qualification of the Class Z shares for sale, and, if necessary or
advisable in connection therewith, of qualifying the Fund as a broker or dealer,
in such states of the United States or other jurisdictions as shall be selected
by the Fund and the Distributor pursuant to Section 5.4 hereof and the cost and
expense payable to each such state for continuing qualification therein until
the Fund decides to discontinue such qualification pursuant to Section 5.4
hereof.

Section 8. INDEMNIFICATION

8.1 The Fund agrees to indemnify, defend and hold the Distributor,
its officers and Directors and any person who controls the Distributor within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers, Directors or any such controlling person may incur under the
Securities Act, or under common law or otherwise, arising out of or based upon
any untrue statement of a material fact contained in the Registration Statement
or Prospectus or arising out of or based upon any alleged omission to state a

5
<PAGE>

material fact required to be stated in either thereof or necessary to make the
statements in either thereof not misleading, except insofar as such claims,
demands, liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with information furnished in writing by the Distributor
to the Fund for use in the Registration Statement or Prospectus; provided,
however, that this indemnity agreement shall not inure to the benefit of any
such officer, Director or controlling person unless a court of competent
jurisdiction shall determine in a final decision on the merits, that the person
to be indemnified was not liable by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties, or by reason of its reckless
disregard of its obligations under this Agreement (disabling conduct), or, in
the absence of such a decision, a reasonable determination, based upon a review
of the facts, that the indemnified person was not liable by reason of disabling
conduct, by (a) a vote of a majority of a quorum of Directors who are neither
"interested persons" of the Fund as defined in Section 2(a)(19) of the
Investment Company Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. The Fund's agreement to indemnify the
Distributor, its officers and Directors and any such controlling person as
aforesaid is expressly conditioned upon the Fund's being promptly notified of
any action brought against the Distributor, its officers or Directors, or any
such controlling person, such notification to be given in writing addressed to
the Fund at its principal business office. The Fund agrees promptly to notify
the Distributor of the
commencement of any litigation or proceedings against it or any of its officers
or Directors in connection with the issue and sale of any Class Z shares.

8.2 The Distributor agrees to indemnify, defend and hold the Fund,
its officers and Directors and any person who controls the Fund, if any, within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the Fund, its
officers and Directors or any such controlling person may incur under the
Securities Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Directors or officers or
such controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus or shall arise out of or be based upon any
alleged omission to state a material fact in connection with such information
required to be stated in the Registration Statement or Prospectus or necessary
to make such information not misleading. The Distributor's agreement to
indemnify the Fund, its officers and Directors and any such

6
<PAGE>

controlling person as aforesaid, is expressly conditioned upon the Distributor's
being promptly notified of any action brought against the Fund, its officers and
Directors or any such controlling person, such notification to be given to the
Distributor in writing at its principal business office.

Section 9. DURATION AND TERMINATION OF THIS AGREEMENT

9.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board of Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Class Z shares of the Fund
and (b) by the vote of a majority of those Directors who are not parties to this
Agreement or interested persons of any such parties and who have no direct or
indirect financial interest in this Agreement.

9.2 This Agreement may be terminated at any time, without the payment
of any penalty, by a majority of the Rule 12b-1 Directors or by vote of a
majority of the outstanding voting securities of the Class Z shares of the Fund,
or by the Distributor, on sixty (60) days' written notice to the other party.
This Agreement shall automatically terminate in the event of its assignment.

9.3 The terms "affiliated person," "assignment," "interested person"
and "vote of a majority of the outstanding voting securities," when used in this
Agreement, shall have the respective meanings specified in the Investment
Company Act.

Section 10. AMENDMENTS TO THIS AGREEMENT

This Agreement may be amended by the parties only if such amendment is
specifically approved by the Board of Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Class Z shares of the Fund.

Section 11. GOVERNING LAW

The provisions of this Agreement shall be construed and interpreted in
accordance with the laws of the State of New York as at the time in effect and
the applicable provisions of the Investment Company Act. To the extent that the
applicable law of the State of New York, or any of the provisions herein,
conflict with the applicable provisions of the Investment Company Act, the
latter shall control.

7
<PAGE>

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year above written.

Prudential Securities
Incorporated

By:
-----------------------
Robert F. Gunia
Senior Vice President

Prudential Growth Opportunity Fund, Inc.

By:
-----------------------
Richard A. Redeker
President

<PAGE>

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the use in the Statement of Additional Information
constituting part of this Post-Effective Amendment No. 21 to the registration
statement on Form N-1A (the "Registration Statement") of our report dated
November 15, 1994, relating to the financial statements and financial highlights
of Prudential Growth Opportunity Fund, Inc., which appears in such Statement of
Additional Information, and to the incorporation by reference of our report into
the Prospectus which constitutes part of this Registration Statement. We also
consent to the reference to us under the heading "Custodian, Transfer and
Dividend Disbursing Agent and Independent Accountants" in such Statement of
Additional Information and to the reference to us under the heading "Financial
Highlights" in such Prospectus.

PRICE WATERHOUSE LLP
New York, NY
October 19, 1995

<PAGE>
[ARTICLE] 6
[CIK] 0000318531
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
[SERIES]
[NUMBER] 001
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (CLASS A)
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] MAR-31-1995
[INVESTMENTS-AT-COST] 474,165,201
[INVESTMENTS-AT-VALUE] 528,693,413
[RECEIVABLES] 11,045,356
[ASSETS-OTHER] 45,649
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 539,784,418
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 20,349,348
[TOTAL-LIABILITIES] 20,349,348
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 456,517,807
[SHARES-COMMON-STOCK] 44,098,309
[SHARES-COMMON-PRIOR] 43,833,907
[ACCUMULATED-NII-CURRENT] 6,486,917
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,902,134
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 54,528,212
[NET-ASSETS] 519,435,070
[DIVIDEND-INCOME] 2,951,888
[INTEREST-INCOME] 839,628
[OTHER-INCOME] 0
[EXPENSES-NET] 4,706,715
[NET-INVESTMENT-INCOME] (915,199)
[REALIZED-GAINS-CURRENT] 7,882,944
[APPREC-INCREASE-CURRENT] 15,467,183
[NET-CHANGE-FROM-OPS] 22,434,928
[EQUALIZATION] 1,457,753
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (34,948,431)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 161,924,864
[NUMBER-OF-SHARES-REDEEMED] (193,582,909)
[SHARES-REINVESTED] 33,299,692
[NET-CHANGE-IN-ASSETS] (9,414,103)
[ACCUMULATED-NII-PRIOR] 444,381
[ACCUMULATED-GAINS-PRIOR] 34,467,603
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,706,577
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 4,706,715
[AVERAGE-NET-ASSETS] 124,937,000
[PER-SHARE-NAV-BEGIN] 12.40
[PER-SHARE-NII] 0.52
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (0.84)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 12.08
[EXPENSE-RATIO] 1.37
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>
[ARTICLE] 6
[CIK] 0000318531
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
[SERIES]
[NUMBER] 002
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (CLASS B)
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] MAR-31-1995
[INVESTMENTS-AT-COST] 474,165,201
[INVESTMENTS-AT-VALUE] 528,693,413
[RECEIVABLES] 11,045,356
[ASSETS-OTHER] 45,649
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 539,784,418
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 20,349,348
[TOTAL-LIABILITIES] 20,349,348
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 456,517,807
[SHARES-COMMON-STOCK] 44,098,309
[SHARES-COMMON-PRIOR] 43,833,907
[ACCUMULATED-NII-CURRENT] 6,486,917
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,902,134
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 54,528,212
[NET-ASSETS] 519,435,070
[DIVIDEND-INCOME] 2,951,888
[INTEREST-INCOME] 839,628
[OTHER-INCOME] 0
[EXPENSES-NET] 4,706,715
[NET-INVESTMENT-INCOME] (915,199)
[REALIZED-GAINS-CURRENT] 7,882,944
[APPREC-INCREASE-CURRENT] 15,467,183
[NET-CHANGE-FROM-OPS] 22,434,928
[EQUALIZATION] 1,457,753
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (34,948,431)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 161,924,864
[NUMBER-OF-SHARES-REDEEMED] (193,582,909)
[SHARES-REINVESTED] 33,299,692
[NET-CHANGE-IN-ASSETS] (9,414,103)
[ACCUMULATED-NII-PRIOR] 444,381
[ACCUMULATED-GAINS-PRIOR] 34,467,603
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,706,577
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 4,706,715
[AVERAGE-NET-ASSETS] 363,502,000
[PER-SHARE-NAV-BEGIN] 11.99
[PER-SHARE-NII] 0.44
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (0.84)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 11.59
[EXPENSE-RATIO] 2.12
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>
[ARTICLE] 6
[CIK] 0000318531
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC.
[SERIES]
[NUMBER] 003
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (CLASS C)
<TABLE>
<S> <C>
[PERIOD-TYPE] 6-MOS
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] MAR-31-1995
[INVESTMENTS-AT-COST] 474,165,201
[INVESTMENTS-AT-VALUE] 528,693,413
[RECEIVABLES] 11,045,356
[ASSETS-OTHER] 45,649
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 539,784,418
[PAYABLE-FOR-SECURITIES] 0
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 20,349,348
[TOTAL-LIABILITIES] 20,349,348
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 456,517,807
[SHARES-COMMON-STOCK] 44,098,309
[SHARES-COMMON-PRIOR] 43,833,907
[ACCUMULATED-NII-CURRENT] 6,486,917
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 1,902,134
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 54,528,212
[NET-ASSETS] 519,435,070
[DIVIDEND-INCOME] 2,951,888
[INTEREST-INCOME] 839,628
[OTHER-INCOME] 0
[EXPENSES-NET] 4,706,715
[NET-INVESTMENT-INCOME] (915,199)
[REALIZED-GAINS-CURRENT] 7,882,944
[APPREC-INCREASE-CURRENT] 15,467,183
[NET-CHANGE-FROM-OPS] 22,434,928
[EQUALIZATION] 1,457,753
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (34,948,431)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 161,924,864
[NUMBER-OF-SHARES-REDEEMED] (193,582,909)
[SHARES-REINVESTED] 33,299,692
[NET-CHANGE-IN-ASSETS] (9,414,103)
[ACCUMULATED-NII-PRIOR] 444,381
[ACCUMULATED-GAINS-PRIOR] 34,467,603
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 1,706,577
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 4,706,715
[AVERAGE-NET-ASSETS] 494,000
[PER-SHARE-NAV-BEGIN] 11.99
[PER-SHARE-NII] 0.44
[PER-SHARE-GAIN-APPREC] 0.00
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (0.84)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 11.59
[EXPENSE-RATIO] 2.12
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>
[ARTICLE] 6
[SERIES]
[NUMBER] 004
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (A)
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] SEP-30-1994
[INVESTMENTS-AT-COST] 471,741,893
[INVESTMENTS-AT-VALUE] 510,802,922
[RECEIVABLES] 31,769,644
[ASSETS-OTHER] 8,490
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 542,581,056
[PAYABLE-FOR-SECURITIES] 11,334,171
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2,397,712
[TOTAL-LIABILITIES] 13,731,883
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 454,876,160
[SHARES-COMMON-STOCK] 86,883,907
[SHARES-COMMON-PRIOR] 79,841,706
[ACCUMULATED-NII-CURRENT] 444,381
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 34,467,603
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 39,061,029
[NET-ASSETS] 528,849,173
[DIVIDEND-INCOME] 5,698,990
[INTEREST-INCOME] 934,384
[OTHER-INCOME] 0
[EXPENSES-NET] 9,675,103
[NET-INVESTMENT-INCOME] (3,041,729)
[REALIZED-GAINS-CURRENT] 44,673,230
[APPREC-INCREASE-CURRENT] (38,737,408)
[NET-CHANGE-FROM-OPS] 2,894,093
[EQUALIZATION] 70,234
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (30,003,582)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 433,710,426
[NUMBER-OF-SHARES-REDEEMED] (377,490,019)
[SHARES-REINVESTED] 28,758,329
[NET-CHANGE-IN-ASSETS] 57,939,481
[ACCUMULATED-NII-PRIOR] 374,147
[ACCUMULATED-GAINS-PRIOR] 24,151,102
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,484,730
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9,675,103
[AVERAGE-NET-ASSETS] 103,078,000
[PER-SHARE-NAV-BEGIN] 13.06
[PER-SHARE-NII] 0.00
[PER-SHARE-GAIN-APPREC] 0.13
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (0.79)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 12.40
[EXPENSE-RATIO] 1.33
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>
[ARTICLE] 6
[SERIES]
[NUMBER] 005
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (B)
<TABLE>
<S> <C>
[PERIOD-TYPE] YEAR
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] SEP-30-1994
[INVESTMENTS-AT-COST] 471,741,893
[INVESTMENTS-AT-VALUE] 510,802,922
[RECEIVABLES] 31,769,644
[ASSETS-OTHER] 8,490
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 542,581,056
[PAYABLE-FOR-SECURITIES] 11,334,171
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2,397,712
[TOTAL-LIABILITIES] 13,731,883
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 454,876,160
[SHARES-COMMON-STOCK] 86,883,907
[SHARES-COMMON-PRIOR] 79,841,706
[ACCUMULATED-NII-CURRENT] 444,381
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 34,467,603
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 39,061,029
[NET-ASSETS] 528,849,173
[DIVIDEND-INCOME] 5,698,990
[INTEREST-INCOME] 934,384
[OTHER-INCOME] 0
[EXPENSES-NET] 9,675,103
[NET-INVESTMENT-INCOME] (3,041,729)
[REALIZED-GAINS-CURRENT] 44,673,230
[APPREC-INCREASE-CURRENT] (38,737,408)
[NET-CHANGE-FROM-OPS] 2,894,093
[EQUALIZATION] 70,234
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (30,003,582)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 433,710,426
[NUMBER-OF-SHARES-REDEEMED] (377,490,019)
[SHARES-REINVESTED] 28,758,329
[NET-CHANGE-IN-ASSETS] 57,939,481
[ACCUMULATED-NII-PRIOR] 374,147
[ACCUMULATED-GAINS-PRIOR] 24,151,102
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,484,730
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9,675,103
[AVERAGE-NET-ASSETS] 425,502,000
[PER-SHARE-NAV-BEGIN] 12.74
[PER-SHARE-NII] (0.09)
[PER-SHARE-GAIN-APPREC] 0.13
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] (0.79)
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 11.99
[EXPENSE-RATIO] 2.09
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>
[ARTICLE] 6
[SERIES]
[NUMBER] 006
[NAME] PRUDENTIAL GROWTH OPPORTUNITY FUND, INC. (C)
<TABLE>
<S> <C>
[PERIOD-TYPE] 2-MOS
[FISCAL-YEAR-END] SEP-30-1994
[PERIOD-END] SEP-30-1994
[INVESTMENTS-AT-COST] 471,741,893
[INVESTMENTS-AT-VALUE] 510,802,922
[RECEIVABLES] 31,769,644
[ASSETS-OTHER] 8,490
[OTHER-ITEMS-ASSETS] 0
[TOTAL-ASSETS] 542,581,056
[PAYABLE-FOR-SECURITIES] 11,334,171
[SENIOR-LONG-TERM-DEBT] 0
[OTHER-ITEMS-LIABILITIES] 2,397,712
[TOTAL-LIABILITIES] 13,731,883
[SENIOR-EQUITY] 0
[PAID-IN-CAPITAL-COMMON] 454,876,160
[SHARES-COMMON-STOCK] 86,883,907
[SHARES-COMMON-PRIOR] 79,841,706
[ACCUMULATED-NII-CURRENT] 444,381
[OVERDISTRIBUTION-NII] 0
[ACCUMULATED-NET-GAINS] 34,467,603
[OVERDISTRIBUTION-GAINS] 0
[ACCUM-APPREC-OR-DEPREC] 39,061,029
[NET-ASSETS] 528,849,173
[DIVIDEND-INCOME] 5,698,990
[INTEREST-INCOME] 934,384
[OTHER-INCOME] 0
[EXPENSES-NET] 9,675,103
[NET-INVESTMENT-INCOME] (3,041,729)
[REALIZED-GAINS-CURRENT] 44,673,230
[APPREC-INCREASE-CURRENT] (38,737,408)
[NET-CHANGE-FROM-OPS] 2,894,093
[EQUALIZATION] 70,234
[DISTRIBUTIONS-OF-INCOME] 0
[DISTRIBUTIONS-OF-GAINS] (30,003,582)
[DISTRIBUTIONS-OTHER] 0
[NUMBER-OF-SHARES-SOLD] 433,710,426
[NUMBER-OF-SHARES-REDEEMED] (377,490,019)
[SHARES-REINVESTED] 28,758,329
[NET-CHANGE-IN-ASSETS] 57,939,481
[ACCUMULATED-NII-PRIOR] 374,147
[ACCUMULATED-GAINS-PRIOR] 24,151,102
[OVERDISTRIB-NII-PRIOR] 0
[OVERDIST-NET-GAINS-PRIOR] 0
[GROSS-ADVISORY-FEES] 3,484,730
[INTEREST-EXPENSE] 0
[GROSS-EXPENSE] 9,675,103
[AVERAGE-NET-ASSETS] 269,000
[PER-SHARE-NAV-BEGIN] 11.61
[PER-SHARE-NII] (0.01)
[PER-SHARE-GAIN-APPREC] 0.39
[PER-SHARE-DIVIDEND] 0.00
[PER-SHARE-DISTRIBUTIONS] 0.00
[RETURNS-OF-CAPITAL] 0.00
[PER-SHARE-NAV-END] 11.99
[EXPENSE-RATIO] 2.22
[AVG-DEBT-OUTSTANDING] 0
[AVG-DEBT-PER-SHARE] 0.00
</TABLE>

<PAGE>

EXHIBIT 18

PRUDENTIAL GROWTH OPPORTUNITY FUND ,INC.
(THE FUND)

PLAN PURSUANT TO RULE 18f-3

The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares. Any material
amendment to this plan is subject to prior approval of the Board of Directors,
including a majority of the independent Directors.

CLASS CHARACTERISTICS

CLASS A SHARES: Class A shares are subject to a high initial sales charge
and a distribution and/or service fee pursuant to Rule 12b-1
under the 1940 Act (Rule 12b-1 fee) not to exceed .30 of 1%
per annum of the average daily net assets of the class. The
initial sales charge is waived or reduced for certain
eligible investors.

CLASS B SHARES: Class B shares are not subject to an initial sales charge
but are subject to a high contingent deferred sales charge
(declining by 1% each year) which will be imposed on certain
redemptions and a Rule 12b-1 fee of not to exceed 1% per
annum of the average daily net assets of the class. The
contingent deferred sales charge is waived for certain
eligible investors. Class B shares automatically convert to
Class A shares approximately seven years after purchase.

CLASS C SHARES: Class C shares are not subject to an initial sales charge
but are subject to a low contingent deferred sales charge
(declining by 1% each year) which will be imposed on certain
redemptions and a Rule 12b-1 fee not to exceed 1% per annum
of the average daily net assets of the class.

CLASS Z SHARES: Class Z shares are not subject to either an initial or
contingent deferred sales charge nor are they subject to any
Rule 12b-1 fee.

INCOME AND EXPENSE ALLOCATIONS

Income, any realized and unrealized capital gains and losses, and expenses
not allocated to a particular class, will be allocated to each class on the
basis of the net asset value of that class in relation to the net asset
value of the Fund.

<PAGE>

DIVIDENDS AND DISTRIBUTIONS

Dividends and other distributions paid by the Fund to each class of shares,
to the extent paid, will be paid on the same day and at the same time, and
will be determined in the same manner and will be in the same amount,
except that the amount of the dividends and other distributions declared
and paid by a particular class may be different from that paid by another
class because of Rule 12b-1 fees and other expenses borne exclusively by
that class.

EXCHANGE PRIVILEGE

Each class of shares is generally exchangeable for the same class of shares
(or the class of shares with similar characteristics), if any, of the other
Prudential Mutual Funds (subject to certain minimum investment
requirements) at relative net asset value without the imposition of any
sales charge.

Class B and Class C shares (which are not subject to a contingent deferred
sales charge) of shareholders who qualify to purchase Class A shares at net
asset value will be automatically exchanged for Class A shares on a
quarterly basis, unless the shareholder elects otherwise.

CONVERSION FEATURES

Class B shares will automatically convert to Class A shares on a quarterly
basis approximately seven years after purchase. Conversions will be
effected at relative net asset value without the imposition of any
additional sales charge.

GENERAL

A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and shall
have separate voting rights on any matter submitted to shareholders in
which the interests of one class differ from the interests of any other
class.

B. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the Fund
for the existence of any material conflicts among the interests of its
several classes. The Directors, including a majority of the independent
Directors, shall take such action as is reasonably necessary to eliminate
any such conflicts that may develop. Prudential Mutual Fund Management,
Inc., the Fund's Manager, will be responsible for reporting any potential
or existing conflicts to the Directors.

<PAGE>

C. For purposes of expressing an opinion on the financial statements of the
Fund, the methodology and procedures for calculating the net asset value
and dividends/distributions of the Fund's several classes and the proper
allocation of income and expenses among such classes will be examined
annually by the Fund's independent auditors who, in performing such
examination, shall consider the factors set forth in the relevant auditing
standards adopted, from time to time, by the American Institute of
Certified Public Accountants.

Dated: July 25, 1995