PRUDENTIAL EQUITY FUND, N-30D, 2000-03-09

PRUDENTIAL EQUITY FUND
N-30D, 2000-03-09

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<PAGE>

(LOGO)

ANNUAL REPORT
DECEMBER 31, 1999

Prudential
Equity Fund, Inc.

(GRAPHIC)

<PAGE>

A Message from the Fund's President February 3, 2000

(PHOTO)

Dear Shareholder,

Prudential Equity Fund returned 12.50% (Class A shares) in
1999. It was helped by a surge of value-style stocks in the
second quarter, but this broad-based value rally was not sustained.
The Fund's returns were supported by its industrial
commodities--including oil companies--and by its investment banks.
However, Tandy, which owns the Radio Shack chain, was among its
largest holdings for most of the year, and made the largest
single contribution to its return. Its hospital management
and tobacco companies performed poorly.

New benchmark
Our benchmark in this report reflects the new categories for
mutual funds introduced by Lipper Inc. in September 1999. Funds
are now classified by their actual holdings instead of by their
objectives. They are in peer groups with the same investment
style--value, growth, or core--and with holdings of the same
general market capitalization--small-, mid-, large-, or multi-cap
(for diversified market capitalizations). Prudential Equity Fund
is classified as a multi-cap value fund because it
currently holds less of the companies with giant-sized
capitalizations than the S&P 500 and much more of companies
with mid-sized capitalizations. The Fund has this focus
because the strong market preference for larger-cap
companies in recent years has not left many value opportunities there.

Because the value investing style has been out of favor,
Lipper's new classification shows the Fund's stock selection
to better advantage. Prudential Equity Fund (Class A shares)
beat the 7.78% Lipper Average of funds investing with a similar style
by more than 4 1/2 percentage points. Moreover, it has had
above-average performance compared with this peer group of
value investors over the past three- and ten-year periods.

Style diversification
Recently, growth investing has had an unusually long run of
outperforming value. Historically, each style has had periods
of superior performance that eventually come to an end.
Prudential recommends owning funds in both stock investment styles so
that you may have a more consistent return over such changes
in market favor. In the following pages, Tom Jackson explains
why he thinks value investing has trailed recently, and what
has affected his investment performance.

Sincerely,

John R. Strangfeld
President
Prudential Equity Fund, Inc.

<PAGE>
Performance Review

(PHOTO)

Thomas R. Jackson
Fund Manager

Investment Goals and Style

Prudential Equity Fund invests primarily in stocks of major,
established companies, located mostly in the United States.
The Fund looks for bargains in the current market, using a
strict value investment style. We look for stocks whose prices seem
too low given their underlying earnings, cash flow, or book value.
Historically, stocks that are inexpensive on these value measures
subsequently have tended to outperform the market averages. Of
course, there can be no assurance that past trends
will continue or that the Fund will achieve its investment
objective of long-term growth of capital.

Although our return in 1999 was well ahead of the Lipper Average
of similar value-oriented funds, it trailed the S&P 500
substantially. Many shareholders were disappointed. I'd
like to explain what I think is happening, and why I'm
sticking to my strategy.

New economy/old economy
In 1999, the majority (63%) of stocks listed on the
New York Stock Exchange actually declined in value. Entire
sectors--such as healthcare, consumer staples, and utilities--
had negative average returns, while the strongest gains were
concentrated in technology stocks. Many investors believe--and
we agree--that technology will transform the way people live
and how business is done, but they appear to focus on technology
stocks almost to the exclusion of others. I'd like to look more
closely at who is going to profit from this technological watershed.

Conventional wisdom today contrasts new economy with old
economy companies. New economy companies provide information
technology equipment or services; old economy companies provide
clothing, food, transportation, retail services, financial
services, medical care, and industrial goods such as metals,
energy commodities, and construction equipment. It is clear
that demand for old economy products and services is not
going to go away. What does this mean for investors?

Opportunities in technology have been attracting both
entrepreneurial young people and investment capital to
new companies at a rapid rate. As a result, competition
is fierce and unpredictable. Many new economy companies
make no profits, while many of those that do are likely
to find their profits squeezed by new competitors because
of the easy

Mid-cap is not mid-size

Prudential Equity Fund is classified multi-cap because
many of its holdings are mid-cap, but this doesn't mean
they are small companies. Market capitalization (the total
price of all of a company's outstanding shares) is the
market's valuation of the company. It is affected by
changes in investor favor as well as by company size
or earnings potential. As a value fund, we hold many
mid-cap stocks because their share prices are currently
depressed. This has happened to many very large old
economy companies, such as Georgia-Pacific. It is
ranked No. 122 in the Fortune 500 and had 1998
sales of $13.2 billion, yet its market cap was
only $8.7 billion at year end, in the mid-cap range,
because forest product companies have been out of
favor.

<PAGE>

availability of venture financing. While
competition may constrain profits, share prices are
often at multiples of today's sales that were unheard of
until last year. Some investors have done well from
this intense activity, especially in the short term,
but we think the risks are high.

Don't count on old economy companies to forfeit!
What about old economy companies? Many are using technological
advances to transform their operations. Many manufacturers,
including the auto companies, are moving toward building on
demand and using Internet-based procurement to reduce costs.
Retailers are reducing inventories and eliminating waste.
Many businesses are tracking their customers' purchases
more closely to improve inventory management. Established
retailers with familiar brand names and customer loyalty can add new
capacities to their existing strengths. Many, notably
bookstores and clothing companies, are now selling from
their own websites with the added advantage of
having "brick-and-mortar" sites where you can see
the actual product or return unwanted
goods. Moreover, existing brand franchises give them
an advertising cost advantage. When a company with
established expertise adds the

<TABLE>
Performance at a Glance
<CAPTION>
Cumulative Total Returns1 As of 12/31/99
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 12.50% 134.46% N/A 320.76%
Class B 11.69 126.02 270.83% 1343.20
Class C 11.69 126.02 N/A 126.04
Class Z 12.81 N/A N/A 73.00
Lipper Multi-Cap Value Fund Avg.3 7.78 135.37 253.34 ***
</TABLE>

<TABLE>
Average Annual Total Returns1 As of 12/31/99
<CAPTION>
One Five Ten Since
Year Years Years Inception2
<S> <C> <C> <C> <C>
Class A 6.87% 17.37% N/A 14.96%
Class B 6.69 17.61 14.00% 16.17
Class C 9.57 17.48 N/A 16.04
Class Z 12.81 N/A N/A 15.37
</TABLE>

Past performance is not indicative of future results. Principal
and investment return will fluctuate, so that an investor's shares,
when redeemed, may be worth more or less than their original cost.

1 Source: Prudential Investments Fund Management LLC and Lipper Inc.
The cumulative total returns do not take into account sales charges.
The average annual total returns do take into account applicable
sales charges. The Fund charges a maximum front-end sales charge
of 5% for Class A shares. Class B shares are subject to a
declining contingent deferred sales charge (CDSC) of 5%,
4%, 3%, 2%, 1%, and 1% for six years. Class B shares will
automatically convert to Class A shares, on a quarterly basis,
approximately seven years after purchase. Class C shares are
subject to a front-end sales charge of 1% and a CDSC of 1%
for 18 months. Class Z shares are not subject to a sales
charge or distribution and service (12b-1) fees.

2 Inception dates: Class A, 1/22/90; Class B, 3/15/82;
Class C, 8/1/94; and Class Z, 3/1/96.

3 Lipper average returns are for all funds in each share
class for the one- , five- , and ten-year periods in the
Multi-Cap Value Fund category. The Lipper average is
unmanaged. Multi-Cap Value funds, by portfolio practice,
invest in a variety of market capitalization ranges without
concentrating 75% of their equity assets in any one market
capitalization range over an extended period of time.
Multi-Cap Value funds will generally have between 25%
and 75% of their assets invested in companies
with market capitalizations (on a three-year weighted
basis) above 300% of the dollar-weighted median market
capitalization of the S&P(R) Mid-Cap 400 Index. Multi-Cap
Value funds seek long-term growth of capital by investing
in companies that are considered undervalued, relative
to a major, unmanaged stock index (such as the S&P(R)
Mid-Cap 400 Index), based on price/earnings, book value,
asset value, or other factors.

(R)S&P is a registered trademark of The McGraw-Hill Companies, Inc.

***Lipper Since Inception returns are 275.40% for Class A,
1207.05% for Class B, 135.61% for Class C, and 70.44% for
Class Z, based on all funds in each share class.

1
<PAGE>

Review Cont'd.

benefits of new technology, it is often in a stronger position
than an enterprise starting from scratch. Moreover, companies
that sell services, such as hospital management, can benefit
from improved procurement, while the demand for many of the
labor-intensive health services is not likely to be reduced
by technology.

Here's where we have found value
The recent steep advances in growth stocks have increased the
value differentials between new and old economy stocks,
providing ample opportunities today.

Upward pressure on commodity prices
Commodity prices are rising across the board--nickel is
up 98%, zinc 21%, aluminum 16%, etc. The price of oil more
than doubled in 1999, and continues to rise in 2000.
Industrial stocks often become value priced when investors
are fearful about the economy, and move up rapidly when
investors become more optimistic. That happened in 1999.
Alcoa (aluminum), one of the Fund's holdings, which also
benefited from a tight market in alumina ore and excellent
management, had very strong returns in
1999. Our 1999 performance also was enhanced by our largest
industry focus: paper companies such as Georgia-Pacific,
Mead, Willamette, and Weyerhauser. Worldwide growth in
capacity has slowed, as company managers are more reluctant
than in the past to build without seeing a respectable return
on their investment. Higher operating rates lead to better
pricing and higher profits.

Integrated oil companies, such as Elf Aquitaine, Atlantic
Richfield, and Kerr-McGee, also had strong returns in 1999,
benefiting from OPEC's production controls and increasing
demand from the reviving Asian economies. We took our
profits on Elf Aquitaine.

Tandy: classic value
We bought Tandy when its price was depressed because of
unwise investments in new businesses in which it had no
competitive advantage. Now it is focusing on its Radio
Shack retail locations, providing sales outlets for the
very competitive computer and cellular telephone industries.
Its stock rose 140% in 1999, driven by two years of
double-digit increases in same-store sales and by
strong profit growth. We have taken some profits,
but it is still a large holding.

Stock market activity is good for broker/investment banks
The high rate of stock issuance and merger and acquisition
activity, as well as strong investor activity in the markets,
benefited our shares in Morgan Stanley Dean Witter, Citigroup,
and Lehman Brothers. We took some profits, selling our holdings
in American Express and reducing our holdings in Citigroup,
Morgan Stanley Dean Witter, and Lehman Brothers. With rising
interest rates and stocks at all-time highs, it seemed reasonable
to take some of your money off the table.

Portfolio Composition
Sectors expressed as a percentage of total net assets as of 12/31/99

Consumer Growth 23.3%
Industrial 22.1
Finance 18.7
Technology 11.3
Consumer Cyclical 9.5
Utility 6.2
Energy 5.5
Cash & Equivalents 3.4

2
<PAGE>

Looking Ahead
Growth and value investing styles often have very different
returns. In 1999, the S&P/BARRA Growth Index finished 16
percentage points ahead of the corresponding value index,
but in 1993, value stocks were 15 percentage points in front.
That's an example of why Prudential recommends that shareholders
participate in both styles. Over the long run, value investing
has been very successful, and the track record of Prudential
Equity Fund has been better than that of the average value fund.

Reversals in market favor are very difficult, if not impossible,
to time. However, rising interest rates have historically been
associated with value markets. So have periods of economic
expansion. After all, if earnings growth will be widespread,
why pay more for it? Value differentials are very broad
today, so it is relatively inexpensive to buy value stocks.
We think we are well positioned for the future.

Five Largest Holdings Expressed as a percentage of net
assets as of 12/31/99
Security/Industry
% of Net Assets Comments

Eastman Kodak Co.
Photography
3.3% Inexpensive because it's perceived
as old economy. A very strong
franchise in photography; adding
digital imaging to its product line
while increasing sales and
earnings. Focused on becoming more
cost-competitive. We think the
expanding U.S. market for digital
photography and the expanding global
market for film (which is
relatively cheap) mean strong
earnings growth.

Columbia/HCA Healthcare Corp.
Health Care
3.1% Largest hospital chain in the United
States. Stock suffered from federal
investigation into its Medicare and
referral procedures. New management
stopped aggressive expansion to focus
on getting operations under control.
Pricing for the hospital
industry appears to have bottomed.
Should benefit from growth in
healthcare demand as the average age
in the United States rises.

Tenet Healthcare Corp.
Health Care
3.0% Second-largest hospital chain in the
United States. Sales were up 10% in
1999. Should benefit from recovery
of industry pricing, continued
cost-control efforts, and the growth
in healthcare demand as the U.S.
population ages.

Georgia-Pacific Corp.
Paper & Forest Products
2.9% Second-largest forest and paper
products company in the world. Demand
for paper is high, while additional
industry capacity is being restrained,
leading to rising prices for paper
products, rising sales, and higher
earnings. Earnings per share at
Georgia-Pacific Corp. are particularly
sensitive to improvements in industry
pricing.

Wellpoint Health Networks, Inc.
Health Care
2.9% A converted California Blue Cross/Blue
Shield company with very strong
management, innovative product design,
well-above-average enrollment and
earnings growth, and high returns on
capital. Should benefit from continued
growth in the demand for
healthcare and the recovery in
industry pricing.

3
<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL EQUITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>

Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Aluminum--2.8%
1,670,000 Alcoa, Inc. $ 138,610,000
- ------------------------------------------------------------
Apparel--0.4%
641,808 Jones Apparel Group, Inc.(a) 17,409,042
- ------------------------------------------------------------
Automobiles & Trucks--1.5%
377,422 Delphi Automotive Systems Corp. 5,944,396
540,000 General Motors Corp. 39,251,250
404,800 Navistar International Corp.(a) 19,177,400
248,800 PACCAR, Inc. 11,024,950
--------------
75,397,996
- ------------------------------------------------------------
Banks & Financial Services--8.4%
1,473,134 Bank of America Corp. 73,932,913
1,884,300 Bank of New York Co., Inc. 75,372,000
315,200 Chase Manhattan Corp. 24,487,100
1,182,601 Citigroup, Inc. 65,708,268
196,500 J.P. Morgan & Co., Inc. 24,881,813
609,000 Lehman Brothers Holdings, Inc. 51,574,687
139,612 Mellon Financial Corp. 4,755,534
384,750 Mercantile Bankshares Corp. 12,287,953
383,400 Morgan Stanley Dean Witter & Co. 54,730,350
450,000 Republic New York Corp. 32,400,000
--------------
420,130,618
- ------------------------------------------------------------
Chemicals--1.0%
828,800 Eastman Chemical Co. 39,523,400
506,900 Wellman, Inc. 9,441,013
--------------
48,964,413
- ------------------------------------------------------------
Computer Hardware--6.5%
2,973,350 Compaq Computer Corp. 80,466,284
977,000 Hewlett-Packard Co. 111,316,938
2,773,900 Seagate Technology, Inc.(a) 129,159,719
--------------
320,942,941
Construction & Housing--0.5%
1,100,000 Centex Corp. $ 27,156,250
- ------------------------------------------------------------
Diversified Consumer Products--3.8%
750,000 Gibson Greetings, Inc.(a) 6,726,562
1,600,000 Loews Corp. 97,100,000
3,360,000 Nabisco Group Holdings Corp. 35,700,000
2,147,900 Sara Lee Corp. 47,388,044
--------------
186,914,606
- ------------------------------------------------------------
Diversified Manufacturing--0.8%
900,000 American Standard Companies,
Inc.(a) 41,287,500
- ------------------------------------------------------------
Electronics--4.8%
1,937,700 Arrow Electronics, Inc.(a) 49,169,137
776,300 Avnet, Inc. 46,966,150
2,544,000 Harris Corp. 67,893,000
465,000 Hitachi, Ltd., ADR (Japan) 75,271,875
--------------
239,300,162
- ------------------------------------------------------------
Fertilizers--0.3%
350,000 Potash Corp. of Saskatchewan, Inc.
(Canada) 16,865,625
- ------------------------------------------------------------
Funeral Services--0.4%
3,065,900 Service Corp. International(a) 21,269,681
- ------------------------------------------------------------
Health Care--13.1%
5,191,300 Columbia/HCA Healthcare Corp. 152,169,981
4,270,940 Foundation Health Systems, Inc.(a) 42,442,466
4,359,700 HEALTHSOUTH Corp.(a) 23,433,388
273,226 LifePoint Hospitals, Inc.(a) 3,227,482
963,600 PacifiCare Health Systems, Inc.(a) 51,070,800
6,269,574 Tenet Healthcare Corp.(a) 147,334,989
273,226 Triad Hospitals, Inc.(a) 4,132,543
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 4

<PAGE>
Portfolio of Investments as
of December 31, 1999 PRUDENTIAL EQUITY FUND, INC.
- ------------------------------------------------------------
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Shares Description Value (Note 1)
<C> <S> <C>
- ------------------------------------------------------------
Health Care (cont'd.)
1,623,500 United HealthCare Corp. $ 86,248,438
2,157,600 Wellpoint Health Networks, Inc.(a) 142,266,750
--------------
652,326,837
- ------------------------------------------------------------
Hotels & Leisure--0.8%
3,111,700 Hilton Hotels Corp. 29,950,113
967,200 Park Place Entertainment Corp.(a) 12,090,000
--------------
42,040,113
- ------------------------------------------------------------
Industrial Technology--0.1%
250,200 Gerber Scientific, Inc. 5,488,763
- ------------------------------------------------------------
Insurance--8.3%
552,800 American Financial Group, Inc. 14,580,100
648,164 American General Corp. 49,179,444
1,962,400 AXA Financial, Inc. 66,476,300
1,891,600 Chubb Corp. 106,520,725
2,805,363 Old Republic International Corp. 38,223,071
2,600,700 SAFECO Corp. 64,692,412
1,144,400 St. Paul Companies, Inc. 38,551,975
589,400 Tokio Marine & Fire Insurance Co.,
Ltd., ADR (Japan) 34,848,275
--------------
413,072,302
- ------------------------------------------------------------
Metals-Non Ferrous--3.3%
3,461,100 Freeport-McMoRan Copper & Gold,
Inc. (Class A)(a) 64,246,669
487,000 Freeport-McMoRan Copper & Gold,
Inc. (Class B)(a) 10,287,875
2,758,800 Newmont Mining Corp. 67,590,600
342,335 Phelps Dodge Corp. 22,979,237
--------------
165,104,381
- ------------------------------------------------------------
Office Equipment & Supplies--0.8%
4,566,000 IKON Office Solutions, Inc. 31,105,875
2,544,000 Lanier Worldwide, Inc.(a) 9,858,000
--------------
40,963,875
Oil & Gas Exploration/Production--5.6%
300,000 Amerada Hess Corp. $ 17,025,000
912,100 Atlantic Richfield Co. 78,896,650
562,319 Kerr-McGee Corp. 34,863,778
1,100,000 Occidental Petroleum Corp. 23,787,500
1,744,770 Total Fina S.A., ADR (France) 120,825,322
--------------
275,398,250
- ------------------------------------------------------------
Paper & Forest Products--13.4%
643,900 Fort James Corp. 17,626,763
2,832,500 Georgia-Pacific Corp. 143,749,375
1,046,000 Georgia-Pacific Corp. (Timber
Group) 25,757,750
1,616,000 International Paper Co. 91,203,000
2,047,000 Mead Corp. 88,916,562
752,500 Rayonier, Inc. 36,355,156
1,101,500 Temple-Inland, Inc. 72,630,156
1,260,000 Weyerhaeuser Co. 90,483,750
2,112,100 Willamette Industries, Inc. 98,080,644
--------------
664,803,156
- ------------------------------------------------------------
Photography--3.3%
2,501,400 Eastman Kodak Co. 165,717,750
- ------------------------------------------------------------
Restaurants--2.5%
1,644,200 CKE Restaurants, Inc. 9,659,675
6,457,300 Darden Restaurants, Inc. 117,038,562
--------------
126,698,237
- ------------------------------------------------------------
Retail--6.1%
1,694,800 Consolidated Stores Corp.(a) 27,540,500
3,110,000 Dillard's, Inc. 62,783,125
6,000,000 Kmart Corp.(a) 60,375,000
1,417,300 Pep Boys - Manny, Moe & Jack 12,932,863
625,000 Sears, Roebuck & Co. 19,023,438
1,845,800 Tandy Corp. 90,790,287
2,125,000 Toys 'R' Us, Inc.(a) 30,414,062
--------------
303,859,275
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 5

Principal
Amount
(000)
SHORT-TERM INVESTMENTS--3.5%
- ------------------------------------------------------------
Commercial Paper--2.4%
Baus Funding LLC
$ 25,000 6.20%, 1/31/00 $ 24,870,833
Falcon Asset Securitization Corp.
38,285 Zero Coupon, 1/13/00 38,208,558
5,050 6.13%, 2/3/00 5,021,623
Old Line Funding Corp.
13,734 6.25%, 1/20/00 13,688,697
Windmill Funding Corp.
25,000 6.10%, 1/27/00 24,889,861
11,000 6.11%, 1/28/00 10,949,593
--------------
Total commercial paper
(cost $117,629,165) 117,629,165
--------------
- ------------------------------------------------------------
Repurchase Agreement--1.1%
56,181 Joint Repurchase Agreement
Account,
2.83%, 1/3/00 (Note 5)
(cost $56,181,000) 56,181,000
--------------
Total short-term investments
(cost $173,810,165) 173,810,165
--------------
- ------------------------------------------------------------
Total Investments--100.3%
(cost $3,755,001,007; Note 4) 4,991,700,525
Liabilities in excess of other
assets--(0.3%) (12,608,015)
--------------
Net Assets--100% $4,979,092,510
--------------
--------------
</TABLE>
- ---------------
(a) Non-income producing security.
ADR--American Depository Receipt.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 6

<PAGE>
Statement of Assets and Liabilities PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Assets December 31, 1999
Investments, at value (cost $3,755,001,007)............................................................. $ 4,991,700,525
Cash.................................................................................................... 253,593
Dividends and interest receivable....................................................................... 8,161,355
Receivable for Fund shares sold......................................................................... 3,698,451
Deferred expenses and other assets...................................................................... 104,707
-----------------
Total assets......................................................................................... 5,003,918,631
-----------------
Liabilities
Payable for Fund shares reacquired...................................................................... 17,738,475
Distribution fee payable................................................................................ 2,496,785
Management fee payable.................................................................................. 1,886,139
Accrued expenses and other liabilities.................................................................. 1,429,049
Payable for investments purchased....................................................................... 1,076,517
Forward currency contracts - amount payable to counterparties........................................... 172,486
Deferred Directors' fees................................................................................ 26,670
-----------------
Total liabilities.................................................................................... 24,826,121
-----------------
Net Assets.............................................................................................. $ 4,979,092,510
-----------------
-----------------
Net assets were comprised of:
Common stock, at par................................................................................. $ 2,583,012
Paid-in capital in excess of par..................................................................... 3,623,182,029
-----------------
3,625,765,041
Undistributed net investment income.................................................................. 2,361,582
Accumulated net realized gain on investments......................................................... 114,438,855
Net unrealized appreciation on investments and foreign currencies.................................... 1,236,527,032
-----------------
Net assets, December 31, 1999........................................................................... $ 4,979,092,510
-----------------
-----------------
Class A:
Net asset value and redemption price per share
($2,240,249,990 / 116,129,521 shares of common stock issued and outstanding)...................... $19.29
Maximum sales charge (5% of offering price).......................................................... 1.02
-----------------
Maximum offering price to public..................................................................... $20.31
-----------------
-----------------
Class B:
Net asset value, offering price and redemption price per share
($2,351,200,014 / 122,077,524 shares of common stock issued and outstanding)...................... $19.26
-----------------
-----------------
Class C:
Net asset value and redemption price per share
($82,736,964 / 4,295,877 shares of common stock issued and outstanding)........................... $19.26
Sales charge (1% of offering price).................................................................. .19
-----------------
Offering price to public............................................................................. $19.45
-----------------
-----------------
Class Z:
Net asset value, offering price and redemption price per share
($304,905,542 / 15,798,248 shares of common stock issued and outstanding)......................... $19.30
-----------------
-----------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 7

<PAGE>
PRUDENTIAL EQUITY FUND, INC.
Statement of Operations
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
December 31,
Net Investment Income 1999
<S> <C>
Income
Dividends (net of foreign withholding
taxes of $1,135,398).................. $ 99,040,729
Interest................................. 12,280,863
-----------------
Total income.......................... 111,321,592
-----------------
Expenses
Management fee........................... 24,100,287
Distribution fee--Class A................ 5,543,526
Distribution fee--Class B................ 26,662,689
Distribution fee--Class C................ 860,782
Transfer agent's fees and expenses....... 6,780,000
Reports to shareholders.................. 626,000
Registration fees........................ 290,000
Custodian's fees and expenses............ 281,000
Directors' fees and expenses............. 45,000
Audit fee and expenses................... 30,000
Legal fees and expenses.................. 30,000
Miscellaneous............................ 127,903
-----------------
Total expenses........................ 65,377,187
-----------------
Net investment income....................... 45,944,405
-----------------
Realized and Unrealized
Gain (Loss) on Investments and
Foreign Currency Transactions
Net realized gain (loss) on:
Investment transactions.................. 646,667,889
Foreign currency transactions............ (2,950)
-----------------
646,664,939
-----------------
Net change in unrealized appreciation (depreciation) on:
Investments.............................. (97,082,959)
Foreign currencies....................... (173,241)
-----------------
(97,256,200)
-----------------
Net gain on investments and foreign
currencies............................... 549,408,739
-----------------
Net Increase in Net Assets
Resulting from Operations................... $ 595,353,144
-----------------
-----------------
</TABLE>

PRUDENTIAL EQUITY FUND, INC.
Statement of Changes in Net Assets
- ------------------------------------------------------------
<TABLE>
<CAPTION>
Increase (Decrease) Year Ended December 31,
in Net Assets 1999 1998
<S> <C> <C>
Operations
Net investment income..... $ 45,944,405 $ 55,919,449
Net realized gain on
investments and foreign
currency
transactions........... 646,664,939 668,341,418
Net change in unrealized
appreciation
(depreciation) on
investments and foreign
currencies............. (97,256,200) (297,985,109)
----------------- ---------------
Net increase in net assets
resulting from
operations............. 595,353,144 426,275,758
----------------- ---------------
Dividends and distributions
(Note 1)
Dividends from net
investment income
Class A................ (28,805,414) (28,885,221)
Class B................ (13,641,876) (17,096,879)
Class C................ (456,451) (476,903)
Class Z................ (4,692,283) (4,978,773)
----------------- ---------------
(47,596,024) (51,437,776)
----------------- ---------------
Distributions from net
realized capital gains
Class A................ (273,294,379) (155,041,927)
Class B................ (312,998,178) (215,519,773)
Class C................ (10,688,756) (6,228,203)
Class Z................ (38,537,773) (22,058,351)
----------------- ---------------
(635,519,086) (398,848,254)
----------------- ---------------
Fund share transactions (net
of share conversions)
(Note 6)
Proceeds from shares
sold................... 4,402,962,271 6,813,992,163
Net asset value of shares
issued in reinvestment
of dividends and
distributions.......... 655,203,376 431,480,103
Cost of shares
reacquired............. (5,601,791,028) (6,953,915,648)
----------------- ---------------
Net increase (decrease) in
net assets from Fund
share transactions..... (543,625,381) 291,556,618
----------------- ---------------
Total increase (decrease).... (631,387,347) 267,546,346
Net Assets
Beginning of year............ 5,610,479,857 5,342,933,511
----------------- ---------------
End of year (a).............. $ 4,979,092,510 $ 5,610,479,857
----------------- ---------------
----------------- ---------------
- ---------------
(a) Includes undistributed
net investment income.... $ 2,361,582 $ 4,016,752
----------------- ---------------
----------------- ---------------
</TABLE>
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 8

<PAGE>
Notes to Financial Statements PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
Prudential Equity 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 long-term growth of capital. The Fund
invests primarily in common stocks of major, established corporations.

- ------------------------------------------------------------
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 Valuation: Securities traded on an exchange and NASDAQ National
Market System securities are valued at the last reported sales price on the
exchange or system on which they are traded or, if no sale was reported on that
date, at the mean between the last reported bid and asked prices or at the bid
price on such day in the absence of an asked price. Securities traded in the
over-the-counter market (including securities listed on exchanges whose primary
market is believed to be over-the-counter) are value by an independent pricing
agent or principal market maker. Short-term securities which mature in more than
60 days are valued based at current market quotations. Short-term securities
which mature in 60 days or less are valued at amortized cost. Securities for
which reliable market quotations are not readily available are valued by the
Valuation Committee based upon procedures adopted by the Board of Directors in
consultation with the manager or subadviser.

In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians under triparty repurchase agreements, as the case may be, 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.

Foreign Currency Translation: The books and records of the Fund are maintained
in U.S. dollars. Foreign currency amounts are translated into U.S. dollars on
the following basis:

(i) market value of investment securities, other assets and liabilities--at the
current rate of exchange.

(ii) purchases and sales of investment securities, income and expenses--at the
rates of exchange prevailing on the respective dates of such transactions.

Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the year, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign exchange rates from the fluctuations arising from changes in the market
prices of securities held at the end of the year. Similarly, the Fund does not
isolate the effect of changes in foreign exchange rates from the fluctuations
arising from changes in the market prices of portfolio securities sold during
the year.

Net realized gains or losses on foreign currency transactions represent net
foreign exchange gains or losses from sales and maturities of short-term
securities, disposition of foreign currency, gains or losses realized between
the trade and settlement dates of security transactions, and the difference
between amounts of dividends, interest and foreign withholding taxes recorded on
the Fund's books and the U.S. dollar equivalent amounts actually received or
paid. Net currency gains and losses from valuing foreign currency denominated
assets and liabilities at year end exchange rates are reflected as a component
of unrealized appreciation or depreciation on investments and foreign
currencies.

Foreign security and currency transactions may involve certain considerations
and risks not typically associated with those of domestic origin as a result of,
among other factors, the possibility of political and economic instability and
the level of governmental supervision and regulation of foreign securities
markets.

Forward Currency Contracts: A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. The Fund enters into forward currency contracts in order to hedge its
exposure to changes in foreign currency exchange rates on its foreign portfolio
holdings or on specific receivables and payables denominated in a foreign
currency. The contracts are valued daily at current exchange rates and any
unrealized gain or loss is included in net unrealized appreciation or
depreciation on investments. Gain or loss is realized on the settlement date of
the contract equal to the difference between the settlement value of the
original and renegotiated forward contracts. This gain or loss, if any, is
included in net realized gain (loss) on foreign currency transactions. Risks may
arise upon entering into these contracts from the potential inability of the
counterparties to meet the terms of their contracts.

Securities Transactions and Net 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 and interest income is recorded on the accrual basis. Expenses
are recorded on the accrual basis which may require the use of certain estimates
by management.
- --------------------------------------------------------------------------------
9

<PAGE>
Notes to Financial Statements PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
Net investment income (other than distribution fees) and unrealized and realized
gains or losses are allocated daily to each class of shares based upon the
relative proportion of net assets of each class at the beginning of the day.

Dividends and Distributions: Dividends from net investment income are declared
and paid semi-annually. The Fund will distribute at least annually net capital
gains in excess of capital loss carryforwards, if any. 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.

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 and net capital gains, if any, to its
shareholders. Therefore, no federal income tax provision is required.

Withholding taxes on foreign dividends have been provided for in accordance with
the Fund's understanding of the applicable country's tax rules and rates.

Reclassification of Capital Accounts: The Fund accounts and reports for
distributions to shareholders in accordance with the American Institute of
Certified Public Accountants' Statement of Position 93-2: Determination,
Disclosure, and Financial Statement Presentation of Income, Capital Gain, and
Return of Capital Distributions by Investment Companies. The effect of applying
this statement was to decrease undistributed net investment income and increase
accumulated net realized gain on investments and foreign currencies by $3,551.
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 Investments Fund Management
LLC ('PIFM'). Pursuant to this agreement, PIFM has responsibility for all
investment advisory services and supervises the subadviser's performance of such
services. PIFM 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. PIFM 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 PIFM is computed daily and payable monthly, at an annual
rate of .50 of 1% of the Fund's average daily net assets up to $500 million,
.475 of 1% of the next $500 million of average daily net assets and .45 of 1% of
the Fund's average daily net assets in excess of $1 billion.

The Fund has a distribution agreement with Prudential Investment Management
Services LLC ('PIMS'). The Fund compensates PIMS 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'), regardless of expenses actually
incurred by PIMS. The distribution fees are accrued daily and payable monthly.
No distribution or service fees are paid to PIMS as distributor of the Class Z
shares of the Fund.

Pursuant to the Class A, B and C Plans, the Fund compensates PIMS 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, Class B and Class C Plans were .25%, 1% and 1%,
respectively, of the average daily net assets of Class A, Class B and Class C
shares for the year ended December 31, 1999.

PIMS has advised the Fund that it has received approximately $910,100 and
$136,300 in front-end sales charges resulting from sales of Class A and Class C
shares, respectively, during the year ended December 31, 1999. From these fees,
PIMS paid such sales charges to affiliated broker-dealers, which in turn paid
commissions to salespersons and incurred other distribution costs.

PIMS has advised the Fund that for the year ended December 31, 1999, it received
approximately $5,458,200 and $35,600 in contingent deferred sales charges
imposed upon certain redemptions by certain Class B and Class C shareholders,
respectively.

PIFM, PIC and PIMS are wholly owned subsidiaries of The Prudential Insurance
Company of America.

As of March 11, 1999, the Fund, along with other affiliated registered
investment companies (the 'Funds'), entered into a syndicated credit agreement
('SCA') with an unaffiliated lender. The maximum commitment under the SCA is $1
billion. Interest on borrowings will be at market rates. The Funds pay a
commitment fee at an annual rate of .065 of 1% on the unused portion of the
credit facility, which is accrued and paid quarterly on a pro rata basis by the
Funds. The SCA expires on March 9, 2000. Prior to March 11, 1999, the Funds had
a credit agreement with a maximum commitment of $200,000,000. The commitment fee
was .055 of 1% on the unused portion of the credit facility. The Fund did not
borrow any amounts pursuant to either agreement during the year ended December
31, 1999. The purpose of the agreement is to serve as an alternative source of
funding for capital share redemptions.
- --------------------------------------------------------------------------------
10

<PAGE>
Notes to Financial Statements PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
Note 3. Other Transactions with Affiliates

Prudential Mutual Fund Services LLC ('PMFS'), a wholly owned subsidiary of PIFM,
serves as the Fund's transfer agent. During the year ended December 31, 1999,
the Fund incurred fees of approximately $5,747,900 for the services of PMFS. As
of December 31, 1999, approximately $485,200 of such fees were due to PMFS.
Transfer agent fees and expenses in the Statement of Operations include certain
out-of-pocket expenses paid to nonaffiliates.

For the year ended December 31, 1999, Prudential Securities Incorporated, a
wholly owned subsidiary of The Prudential Insurance Company of America, earned
$264,017 in brokerage commissions from portfolio transactions executed on behalf
of the Fund.

- ------------------------------------------------------------
Note 4. Portfolio Securities

Purchases and sales of investment securities, other than short-term investments,
for the year ended December 31, 1999 aggregated $437,959,534 and $667,991,750,
respectively.

The federal income tax basis of the Fund's investments at December 31, 1999 was
substantially the same as for financial reporting purposes and, accordingly, net
unrealized appreciation for federal income tax purposes was $1,236,699,518
(gross unrealized appreciation--$1,627,230,044; gross unrealized
depreciation--$390,530,526).

The Fund will elect to treat net currency losses of approximately $177,100
incurred in the two month period ended December 31, 1999 as having been incurred
in the following fiscal year.

At December 31, 1999, the Fund had outstanding forward currency contracts to
sell foreign currencies as follows:
<TABLE>
<CAPTION>
Value at
Forward Currency Settlement Current
Sale Contracts Date Receivable Value Depreciation
- ------------------------ --------------- ----------- ------------
<S> <C> <C> <C>
Japanese Yen,
expiring 3/30/2000 $38,626,821 $38,799,307 $ (172,486)
--------------- ----------- ------------
--------------- ----------- ------------
</TABLE>

- ------------------------------------------------------------
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 December 31, 1999, the
Fund had a 7.93% undivided interest in the joint account. The undivided interest
for the Fund represents $56,181,000 in principal amount. As of such date, each
repurchase agreement in the joint account and the collateral therefor were as
follows:

ABN AMRO, Inc., 2.75%, in the principal amount of $90,000,000, repurchase price
$90,020,625, due 1/3/2000. The value of the collateral including accrued
interest was $91,800,968.

Bear, Stearns & Co., Inc., 2.75%, in the principal amount of $210,000,000,
repurchase price $210,048,125, due 1/3/2000. The value of the collateral
including accrued interest was $221,923,528.

Lehman Brothers, Inc., 2.50%, in the principal amount of $100,000,000,
repurchase price $100,020,833, due 1/3/2000. The value of the collateral
including accrued interest was $101,979,049.

Morgan (J.P.) Securities, Inc., 3.00%, in the principal amount of $120,000,000,
repurchase price $120,030,000, due 1/3/2000. The value of the collateral
including accrued interest was $122,400,783.

Morgan (J.P.) Securities, Inc., 4.50%, in the principal amount of $78,685,000,
repurchase price $78,714,507, due 1/3/2000. The value of the collateral
including accrued interest was $80,259,686.

Salomon Smith Barney, Inc., 2.00%, in the principal amount of $110,000,000,
repurchase price $110,018,333, due 1/3/2000. The value of the collateral
including accrued interest was $112,231,078.

- ------------------------------------------------------------
Note 6. Capital

The Fund offers Class A, Class B, Class C and Class Z 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 front-end
sales charge of 1% and a contingent deferred sales charge of 1% during the first
18 months. Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualified to purchase Class A
shares at net asset value. Class Z shares are not subject to any sales charge
and are offered exclusively for sale to a limited group of investors.

There are 1 billion shares of common stock, $.01 par value per share, divided
into four classes, designated Class A, Class B, Class C and Class Z common
stock, each of which consists of 250 million authorized shares.
- --------------------------------------------------------------------------------
11

<PAGE>
Notes to Financial Statements PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
Transactions in shares of common stock were as follows:
<TABLE>
<CAPTION>
Class A Shares Amount
- --------------------------------- ------------ ---------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold...................... 177,649,766 $ 3,645,037,492
Shares issued in reinvestment of
dividends...................... 14,887,348 287,460,109
Shares reacquired................ (203,602,465) (4,166,822,984)
------------ ---------------
Net decrease in shares
outstanding before
conversions.................... (11,065,351) (234,325,383)
Shares issued upon conversion
from Class B................... 11,272,942 232,069,406
------------ ---------------
Net increase (decrease) in shares
outstanding.................... 207,591 $ (2,255,977)
------------ ---------------
------------ ---------------
Year ended December 31, 1998:
Shares sold...................... 257,279,581 $ 5,379,932,743
Shares issued in reinvestment of
dividends...................... 8,698,400 174,395,442
Shares reacquired................ (257,576,459) (5,396,913,633)
------------ ---------------
Net increase in shares
outstanding before
conversions.................... 8,401,522 157,414,552
Shares issued upon conversion
from Class B................... 11,176,872 225,279,045
------------ ---------------
Net increase in shares
outstanding.................... 19,578,394 $ 382,693,597
------------ ---------------
------------ ---------------
<CAPTION>
Class B
- ---------------------------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold...................... 28,723,418 $ 588,852,845
Shares issued in reinvestment of
dividends...................... 16,308,918 313,982,958
Shares reacquired................ (59,782,294) (1,212,006,187)
------------ ---------------
Net decrease in shares
outstanding before
conversions.................... (14,749,958) (309,170,384)
Shares reacquired upon conversion
into Class A................... (11,310,483) (232,069,406)
------------ ---------------
Net decrease in shares
outstanding.................... (26,060,441) $ (541,239,790)
------------ ---------------
------------ ---------------
Year ended December 31, 1998:
Shares sold...................... 57,870,061 $ 1,203,484,100
Shares issued in reinvestment of
dividends...................... 11,185,741 223,571,853
Shares reacquired................ (65,658,297) (1,355,114,612)
------------ ---------------
Net increase in shares
outstanding before
conversions.................... 3,397,505 71,941,341
Shares reacquired upon conversion
into Class A................... (11,145,974) (225,279,045)
------------ ---------------
Net decrease in shares
outstanding.................... (7,748,469) $ (153,337,704)
------------ ---------------
------------ ---------------
</TABLE>

<TABLE>
<CAPTION>
Class C Shares Amount
- --------------------------------- ------------ ---------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold...................... 2,648,837 $ 54,352,108
Shares issued in reinvestment of
dividends...................... 555,178 10,671,295
Shares reacquired................ (3,410,316) (69,046,229)
------------ ---------------
Net decrease in shares
outstanding.................... (206,301) $ (4,022,826)
------------ ---------------
------------ ---------------
Year ended December 31, 1998:
Shares sold...................... 3,508,923 $ 72,836,611
Shares issued in reinvestment of
dividends...................... 328,636 6,521,538
Shares reacquired................ (2,977,095) (61,439,724)
------------ ---------------
Net increase in shares
outstanding.................... 860,464 $ 17,918,425
------------ ---------------
------------ ---------------
<CAPTION>
Class Z
- ---------------------------------
<S> <C> <C>
Year ended December 31, 1999:
Shares sold...................... 5,576,859 $ 114,719,826
Shares issued in reinvestment of
dividends...................... 2,230,904 43,089,014
Shares reacquired................ (7,591,295) (153,915,628)
------------ ---------------
Net increase in shares
outstanding.................... 216,468 $ 3,893,212
------------ ---------------
------------ ---------------
Year ended December 31, 1998:
Shares sold...................... 7,643,141 $ 157,738,709
Shares issued in reinvestment of
dividends...................... 1,343,793 26,991,270
Shares reacquired................ (6,851,762) (140,447,679)
------------ ---------------
Net increase in shares
outstanding.................... 2,135,172 $ 44,282,300
------------ ---------------
------------ ---------------
</TABLE>
- --------------------------------------------------------------------------------
12

- ---------------
(a) 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.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 14

<PAGE>
Financial Highlights PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C Class Z
------------------------------------------------------- ----------------------------------
Year Ended December 31, Year Ended December 31,
------------------------------------------------------- ----------------------------------
1999 1998 1997 1996 1995 1999 1998 1997
------- ------- ------- ------- ------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 19.73 $ 19.83 $ 17.24 $ 16.43 $ 13.24 $ 19.76 $ 19.87 $ 17.26
------- ------- ------- ------- ------- -------- -------- --------
Income from investment
operations
Net investment income.......... .10 .16 .25 .22 .16 .31 .35 .42
Net realized and unrealized
gain on investments and
foreign currencies.......... 2.15 1.35 3.69 2.51 3.87 2.16 1.36 3.72
------- ------- ------- ------- ------- -------- -------- --------
Total from investment
operations............... 2.25 1.51 3.94 2.73 4.03 2.47 1.71 4.14
------- ------- ------- ------- ------- -------- -------- --------
Less distributions
Dividends from net investment
income...................... (.11) (.12) (.22) (.22) (.16) (.32) (.33) (.40)
Distributions in excess of net
investment income........... -- -- -- (.01) -- -- -- --
Distributions from net realized
capital gains............... (2.61) (1.49) (1.13) (1.69) (.68) (2.61) (1.49) (1.13)
------- ------- ------- ------- ------- -------- -------- --------
Total distributions......... (2.72) (1.61) (1.35) (1.92) (.84) (2.93) (1.82) (1.53)
------- ------- ------- ------- ------- -------- -------- --------
Net asset value, end of
period...................... $ 19.26 $ 19.73 $ 19.83 $ 17.24 $ 16.43 $ 19.30 $ 19.76 $ 19.87
------- ------- ------- ------- ------- -------- -------- --------
------- ------- ------- ------- ------- -------- -------- --------
TOTAL RETURN(a):............... 11.69% 7.55% 23.05% 17.14% 30.62% 12.81% 8.56% 24.29%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)....................... $82,737 $88,839 $72,244 $47,477 $23,894 $304,906 $307,921 $267,121
Average net assets (000)....... $86,078 $82,907 $60,434 $36,745 $12,190 $302,528 $311,816 $ 57,646
Ratios to average net assets:
Expenses, including
distribution fees........ 1.61% 1.60% 1.63% 1.64% 1.66% .61% .60% .63%
Expenses, excluding
distribution fees........ .61% .60% .63% .64% .66% .61% .60% .63%
Net investment income....... .50% .67% 1.11% 1.37% 1.03% 1.50% 1.67% 2.11%
<CAPTION>
March 1,
1996(c)
Through
December 31,
1996
------------
<S> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value, beginning of
period...................... $ 17.10
------------
Income from investment
operations
Net investment income.......... .37
Net realized and unrealized
gain on investments and
foreign currencies.......... 1.88
------------
Total from investment
operations............... 2.25
------------
Less distributions
Dividends from net investment
income...................... (.39)
Distributions in excess of net
investment income........... (.01)
Distributions from net realized
capital gains............... (1.69)
------------
Total distributions......... (2.09)
------------
Net asset value, end of
period...................... $ 17.26
------------
------------
TOTAL RETURN(a):............... 13.65%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period
(000)....................... $128,752
Average net assets (000)....... $124,631
Ratios to average net assets:
Expenses, including
distribution fees........ .64%(b)
Expenses, excluding
distribution fees........ .64%(b)
Net investment income....... 2.43%(b)
</TABLE>

- ---------------
(a) 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.
(b) Annualized.
(c) Commencement of offering of Class Z shares.
- --------------------------------------------------------------------------------
See Notes to Financial Statements. 15

<PAGE>
Report of Independent Accountants PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors of
Prudential Equity 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 Equity Fund, Inc. (the
'Fund') at December 31, 1999, 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 periods presented, in
conformity with accounting principles generally accepted in the United States.
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 in the United States 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 December 31, 1999 by correspondence with the custodian and
brokers, provide a reasonable basis for the opinion expressed above.

PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, New York
February 11, 2000

Tax Information (Unaudited) PRUDENTIAL EQUITY FUND, INC.
- --------------------------------------------------------------------------------
We are required by the Internal Revenue Code to advise you within 60 days of the
Fund's fiscal year end (December 31, 1999) as to the federal tax status of
dividends paid by the Fund during its fiscal year ended December 31, 1999.

During 1999, the Fund paid dividends of $2.876 per Class A share, $2.715 per
Class B share, $2.715 per Class C share and $2.926 per Class Z share. Of these
amounts, $2.41 per Class A, B, C and Z shares represent distributions from
long-term capital gains and is taxable as such. The remaining $0.466 per Class A
share, $0.305 per Class B share, $0.305 per Class C share and $0.516 per Class Z
share represent dividends from ordinary income (net investment income and
short-term capital gains). Further, we wish to advise you that 98.66% of the
ordinary income dividends paid in 1999 qualified for the corporate dividends
received deduction available to corporate taxpayers.

For the purpose of preparing your annual federal income tax return, however, you
should report the amounts as reflected on the appropriate Form 1099-DIV or
substitute 1099-DIV.
- --------------------------------------------------------------------------------
16

<PAGE>

Getting the Most from Your Prudential Mutual Fund

How many times have you read these reports--or other
financial materials-- and stumbled across a word that
you don't understand?

Many shareholders have run into the same problem. We'd
like to help. So we'll use this space from time to time
to explain some of the words you might have read, but not
understood. And if you have a favorite word that no one can
explain to your satisfaction, please write to us.

Basis Point: 1/100th of 1%. For example, one-half of one
percent is 50 basis points.

Collateralized Mortgage Obligations (CMOs): Mortgage-backed
bonds that separate mortgage pools into different maturity
classes, called tranches. These instruments are sensitive
to changes in interest rates and homeowner refinancing
activity. They are subject to prepayment and maturity
extension risk.

Derivatives: Securities that derive their value from other
securities. The rate of return of these financial instruments
rises and falls--sometimes very suddenly--in response to
changes in some specific interest rate, currency, stock,
or other variable.

Discount Rate: The interest rate charged by the
Federal Reserve on loans to member banks.

Federal Funds Rate: The interest rate charged by one
bank to another on overnight loans.

Futures Contract: An agreement to purchase or sell a
specific amount of a commodity or financial instrument at a
set price at a specified date in the future.

Leverage: The use of borrowed assets to enhance return.
The expectation is that the interest rate charged on
borrowed funds will be lower than the return on the
investment. While leverage can increase
profits, it can also magnify losses.

Liquidity: The ease with which a financial instrument
(or product) can be bought or sold (converted into cash)
in the financial markets.

Price/Earnings Ratio: The price of a share of stock divided by the
earnings per share for a 12-month period.

Option: An agreement to purchase or sell something, such
as shares of stock, by a certain time for a specified price.
An option need not be exercised.

Spread: The difference between two values; often
used to describe the difference between "bid" and "asked"
prices of a security, or between the yields of two similar
maturity bonds.

Yankee Bond: A bond sold by a foreign company or government
in the U.S. market and denominated in U.S. dollars.

<PAGE>
Comparing a $10,000 Investment
- --------------------------------------------------------
Prudential Equity Fund, Inc. vs. the S&P 500 Index

Class A
(GRAPH)

Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 14.96%
Five Years 17.37%
One Year 6.87%

Without Sales Charge As of 12/31/99
Since Inception 15.56%
Five Years 18.58%
One Year 12.50%

Class B
(GRAPH)

Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 16.17%
Ten Years 14.00%
Five Years 17.61%
One Year 6.69%

Without Sales Charge As of 12/31/99
Since Inception 16.17%
Ten Years 14.00%
Five Years 17.71%
One Year 11.69%

Past performance is not indicative of future results.
Principal and investment return will fluctuate, so that
an investor's shares, when redeemed, may be worth more or
less than their original cost. The information beneath the
graphs is designed to give you an idea of how much the
Fund's returns canfluctuate from year to year by measuring
the best and worst calendar years in terms of total annual
return since inception of each share class (or for the
past ten years for Class B shares).

These graphs compare a $10,000 investment in the Prudential
Equity Fund, Inc. (Class A, B, C, and Z shares) with a
similar investment in the Standard & Poor's 500 Composite
Stock Price Index (S&P 500 Index) by portraying the initial
account values of Class A, C, and Z shares at the commencement
of operations, at the beginning of the ten-year period for
Class B shares, and at the end of the fiscal year (December
31), as measured on a quarterly basis, beginning in 1990 for
Class A, 1989 for Class B, 1994 for Class C, and 1996 for
Class Z shares. For purposes of the graphs, and unless
otherwise indicated, it has been assumed that (a) the
maximum applicable front-end sales charge was deducted
from the initial $10,000 investment in Class A and Class C

<PAGE>

Class C
(GRAPH)
Average Annual Total Returns
With Sales Charge As of 12/31/99
Since Inception 16.04%
Five Years 17.48%
One Year 9.57%

Without Sales Charge As of 12/31/99
Since Inception 16.25%
Five Years 17.71%
One Year 11.69%

Class Z
(GRAPH)

Average Annual Total Returns
As of 12/31/99
Since Inception 15.37%
One Year 12.81%

shares; (b) the maximum applicable contingent deferred
sales charges were deducted from the value of the investment
in Class B and Class C shares, assuming full redemption on
December 31, 1999; (c) all recurring fees (including
management fees) were deducted; and (d) all dividends and
distributions were reinvested. Class B shares will
automatically convert to Class A shares, on a quarterly
basis, approximately seven years after purchase. This
conversion feature is not reflected in the graphs. Class
Z shares are not subject to a sales charge or distribution
and service (12b-1) fees.

The S&P 500 Index is an unmanaged index of 500 stocks of
large U.S. companies. It gives a broad look at how stock
prices have performed. The S&P 500 Index returns include
the reinvestment of all dividends, but do not include the
effect of sales charges or operating expenses of a mutual
fund. The securities in the Index may differ substantially
from the securities in the Fund. The Index is not the only
one that may be used to characterize performance of equity
funds, and other indexes may portray different comparative
performance. Investors cannot invest directly in an index.

These graphs are furnished to you in accordance with SEC regulations.

<PAGE>
The Prudential Mutual Fund Family

Prudential offers a broad range of mutual funds designed
to meet your individual needs. For information about these
funds, contact your financial adviser or call us at (800)
225-1852. Read the prospectus carefully before you invest or
send money.

STOCK FUNDS
Prudential Emerging Growth Fund, Inc.
Prudential Equity Fund, Inc.
Prudential Equity Income Fund
Prudential Index Series Fund
Prudential Small-Cap Index Fund
Prudential Stock Index Fund
The Prudential Investment Portfolios, Inc.
Prudential Jennison Growth Fund
Prudential Jennison Growth & Income Fund
Prudential Mid-Cap Value Fund
Prudential Real Estate Securities Fund
Prudential Sector Funds, Inc.
Prudential Financial Services Fund
Prudential Health Sciences Fund
Prudential Technology Fund
Prudential Utility Fund
Prudential Small-Cap Quantum Fund, Inc.
Prudential Small Company Value Fund, Inc.
Prudential Tax-Managed Funds
Prudential Tax-Managed Equity Fund
Prudential 20/20 Focus Fund
Nicholas-Applegate Fund, Inc.
Nicholas-Applegate Growth Equity Fund
Target Funds
Large Capitalization Growth Fund
Large Capitalization Value Fund
Small Capitalization Growth Fund
Small Capitalization Value Fund
Asset Allocation/Balanced Funds
Prudential Balanced Fund
Prudential Diversified Funds
Conservative Growth Fund
Moderate Growth Fund
High Growth Fund
The Prudential Investment Portfolios, Inc.
Prudential Active Balanced Fund

GLOBAL FUNDS
Global Stock Funds
Prudential Developing Markets Fund
Prudential Developing Markets Equity Fund
Prudential Latin America Equity Fund
Prudential Europe Growth Fund, Inc.
Prudential Global Genesis Fund, Inc.
Prudential Index Series Fund
Prudential Europe Index Fund
Prudential Pacific Index Fund
Prudential Natural Resources Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential World Fund, Inc.
Prudential Global Growth Fund
Prudential International Value Fund
Prudential Jennison International Growth Fund
Global Utility Fund, Inc.

Target Funds
International Equity Fund

Global Bond Funds
Prudential Global Total Return Fund, Inc.
Prudential International Bond Fund, Inc.

BOND FUNDS
Taxable Bond Funds
Prudential Diversified Bond Fund, Inc.
Prudential Government Income Fund, Inc.
Prudential Government Securities Trust
Short-Intermediate Term Series
Prudential High Yield Fund, Inc.
Prudential High Yield Total Return Fund, Inc.
Prudential Index Series Fund
Prudential Bond Market Index Fund
Prudential Structured Maturity Fund, Inc.
Income Portfolio

Target Funds
Total Return Bond Fund
Tax-Exempt Bond Funds
Prudential California Municipal Fund
California Series
California Income Series
Prudential Municipal Bond Fund
High Income Series
Insured Series
Prudential Municipal Series Fund
Florida Series
Massachusetts Series
New Jersey Series
New York Series
North Carolina Series
Ohio Series
Pennsylvania Series
Prudential National Municipals Fund, Inc.

MONEY MARKET FUNDS
Taxable Money Market Funds
Cash Accumulation Trust
Liquid Assets Fund
National Money Market Fund
Prudential Government Securities Trust
Money Market Series
U.S. Treasury Money Market Series
Prudential Special Money Market Fund, Inc.
Money Market Series
Prudential MoneyMart Assets, Inc.

Tax-Free Money Market Funds
Prudential Tax-Free Money Fund, Inc.
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

<PAGE>
Prudential Mutual Funds
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

(800) 225-1852

Fund Symbols
NASDAQ CUSIP
Class A PBQAX 744316100
Class B PBQFX 744316209
Class C PRECX 744316308
Class Z PEQZX 744316407

visit our website at www.prudential.com

Directors
Delayne Dedrick Gold
Robert F. Gunia
Douglas H. McCorkindale
Thomas T. Mooney
Stephen P. Munn
David R. Odenath, Jr.
Richard A. Redeker
Robin B. Smith
John R. Strangfeld
Louis A. Weil, III
Clay T. Whitehead

Officers
John R. Strangfeld, President
Robert F. Gunia, Vice President
Grace C. Torres, Treasurer
Marguerite E. H. Morrison, Secretary
Stephen M. Ungerman, Assistant Treasurer

Manager
Prudential Investments Fund Management LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Investment Adviser
The Prudential Investment Corporation
Prudential Plaza
Newark, NJ 07102-3777

Distributor
Prudential Investment Management Services LLC
Gateway Center Three
100 Mulberry Street
Newark, NJ 07102-4077

Custodian
State Street Bank and Trust Company
One Heritage Drive
North Quincy, MA 02171

Transfer Agent
Prudential Mutual Fund Services LLC
P.O. Box 15005
New Brunswick, NJ 08906

Independent Accountants
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

Legal Counsel
Gardner, Carton & Douglas
Quaker Tower
321 North Clark Street
Chicago, IL 60610-4795

The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.

This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.

(ICON) Printed on Recycled Paper

<PAGE>

Fund Symbols
NASDAQ CUSIP
Class A PBQAX 744316100
Class B PBQFX 744316209
Class C PRECX 744316308
Class Z PEQZX 744316407

visit our website at www.prudential.com

The views expressed in this report and information about
the Fund's portfolio holdings are for the period covered
by this report and are subject to change thereafter.

This report is not authorized for distribution to prospective
investors unless preceded or accompanied by a current prospectus.

MF101E (ICON) Printed on Recycled Paper