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<PAGE> PAGE 2
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<PAGE> PAGE 3
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<PAGE> PAGE 4
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<PAGE> PAGE 7
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<PAGE> PAGE 10
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SIGNATURE SUSAN C. COTE'
TITLE TREASURER
For fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77L
Changes in Accounting Principles and Practices
Effective May 1, 1993, the Prudential Multi-Sector Fund, Inc.
began accounting and reporting 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.
The effect of adopting this statement was to decrease undistributed
net investment income by $86,242, and increase accumulated net
realized gains by $86,242 compared to amounts previously reported
through April 30, 1993. During the fiscal year ended April 30,
1994, the Fund reclassified $652,086 of foreign currency losses to
undistributed net investment income from accumulated net realized
gains on investment transactions. Net investment income, net
realized gains, and net assets were not affected by this change.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 D
Policies With Respect to Security Investments
At a meeting of the Board of Directors held on February 8,
1994, the Fund approved (i) the use of tri-party repurchase
agreements and (ii) the use of Bank of New York, Chemical Bank,
Morgan Guaranty Trust Company and Bankers Trust Company as
subcustodians in connection with effecting tri-party repurchase
transactions.
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 D
Policies With Respect to Security Investments
At a meeting of the Board of Directors held on November 9,
1993, the Fund adopted new procedures pursuant to Rules 10f-3, 17a-
7 and 17e-1 of the Investment Company Act of 1940. The revised
procedures eliminate the need for the Board of Directors to review
annually the Fund's Rules 10f-3, 17a-7 and 17e-1 procedures.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 D
Policies With Respect to Security Investments
At a meeting of the Board of Directors held on May 4, 1993,
the Directors approved a Distribution Agreement and a Distribution
and Service Plan for an additional class of shares (Class D shares)
and, subject to shareholder approval, conforming amendments to
Class A and Class B Distribution Agreements and Distribution and
Service Plans which will modify the Class A and Class B plans to
provide that the distribution and service fees, as under the Class
D plan of distribution, will be paid as compensation for, and not
as reimbursement of expenses incurred in, performing distribution
activities, personal service and maintenance to shareholder
accounts.
At a meeting of the Board of Directors held on May 4, 1993,
the Directors approved changes in the Fund's investment policies
and restrictions relating to (i) deletion of an investment
restriction regarding restricted and illiquid securities and
replacement of such restriction with a non-fundamental policy which
can be changed by the Board of Director; (ii) deletion of an
investment restriction which limits investment in securities where
officers and Directors of the Fund or the Manager or Subadviser own
in the aggregate more than 5% of the outstanding securities of an
issuer (an Ohio blue sky limitation) and replacement of such
restriction with a non-fundamental policy which can be changed by
the Board of Director; and (iii) modification of the investment
restriction which limits the purchase of securities of an issuer if
the Fund would hold more than 10% of any one class of securities of
an issuer.
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77D
Policies with Respect to Security Investments
At a meeting of the Board of Directors held on February 8,
1994, the Board approved the following investment policy
modification:
(a) approval of an investment policy modification to permit
the Fund to invest in bonds rated Baa or lower by Moody's
Investors Services or BBB or lower by Standard & Poors
Corporation, or in non rated fixed income securities,
which, in the opinion of the Fund's Subadviser, are of
comparable quality with up to 30% of the Fund's net
assets.
MSF494.77D
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77D
Policies with Respect to Security Investments
At a meeting of the Board of Directors held on February 8,
1994, the Board approved the following investment policy
modification:
(a) approval of an investment policy modification to permit
the Fund to invest in bonds rated Baa or lower by Moody's
Investors Services or BBB or lower by Standard & Poors
Corporation, or in non rated fixed income securities,
which, in the opinion of the Fund's Subadviser, are of
comparable quality with up to 30% of the Fund's net
assets.
MSF494.77D
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 D
Policies With Respect to Security Investments
At a meeting of the Board of Directors held on February 8,
1994, the Fund approved (i) the use of tri-party repurchase
agreements and (ii) the use of Bank of New York, Chemical Bank,
Morgan Guaranty Trust Company and Bankers Trust Company as
subcustodians in connection with effecting tri-party repurchase
transactions.
MSF494.77D
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
APS Holding Corporation
2. Date of Purchase
9/23/93
3. Number of Securities Purchased
45,000
4. Dollar Amount of Purchase
$697,500
5. Price Per Unit
$15.50
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
The First Boston Corporation
7. Other Members of the Underwriting Syndicate
A.G. Edwards & Sons, Inc.
Wertheim Schroder & Co. Incorporated
Allen & Company Incorporated
Baird, Patrick & Co., Inc.
Bear, Stearns & Co. Inc.
William Blair & Company
Alex. Brown & Sons Incorporated
Dillon, Read & Co. Inc.
First of Michigan Corporation
Furman Selz Incorporated
Gabelli & Company, Inc.
Hambrecht & Quist Incorporated
Huntleigh Securities Corporation
Invemed Associates, Inc.
Janney Montgomery Scott Inc.
Kemper Securities, Inc.
Kidder, Peabody & Co. Incorporated
C.J. Lawrence Inc.
Lazard Freres & Co.
Legg Mason Wood Walker, Incorporated
Lehman Brothers Inc.
Mabon Securitites Corp.
McDonald & Company Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Montgomery Securities
Moors & Cabot, Inc.
Morgan Keegan & Company, Inc.
J.P. Morgan Securities Inc.
Morgan Stanley & Co., Inc.
Neuberger & Berman
The Ohio Company
Oppenheimer & Co., Inc.
Paribas Corporation
Parker/Hunter Incorporated
The Principal/Eppler, Guerin & Turner, Inc.
Prudential Securities Incorporated
Rauscher Pierce Refsnes, Inc.
Raymond James & Associates, Inc.
Robertson, Stephens & Company, L.P.
The Robinson-Humphrey Company, Inc.
Salomon Brothers Inc.
Smith Barney Shearson Inc.
Sutro & Co. Incorporated
Dean Witter Reynolds Inc.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
The Allstate Corporation
2. Date of Purchase
6/02/93
3. Number of Securities Purchased
15,700
4. Dollar Amount of Purchase
$423,900
5. Price Per Unit
$27
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Goldman, Sachs & Co.
7. Other Members of the Underwriting Syndicate
Morgan Stanley & Co. Incorporated
Dean Witter Reynolds Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Salomon Brothers Inc.
Shearson Lehman Brothers Inc.
Advest, Inc.
Arnhold and S. Bleichroeder, Inc.
Robert W. Baird & Co. Incorporated
Bear, Stearns & Co. Inc.
Sanford C. Bernstein & Co., Inc.
William Blair & Company
J.C. Bradford & Co.
Alex. Brown & Sons Incorporated
The Chapman Company
The Chicago Dearborn Company
Cleary Gull Reiland & McDevitt Inc.
Conning & Company
Cowen & Company
Crowell, Weedon & Co.
Dain Bosworth Incorporated
D.A. Davidson & Co. Incorporated
Dillon, Read & Co.
Doft & Co. Inc.
Doley Securities, Inc.
A.G. Edwards & Sons, Inc.
Fahnestock & Co. Inc.
First Albany Corporation
First Analysis Securities Corporation
The First Boston Corporation
First Manhattan Co.
Furman Selz Incorporated
Hambrecht & Quist Incorporated
J.J.B. Hilliard, W.L. Lyons, Inc.
Interstate/Johnson Lane Corporation
Edward D. Jones & Co.
Kemper Securities, Inc.
Kidder, Peabody & Co. Incorporated
Ladenburg, Thalmann & Co. Inc.
Laidlaw Equities, Inc.
Lazard Freres & Co.
Legg Mason Wood Walker, Incorporated
McDonald & Company Securities, Inc.
Montgomery Securities
J.P. Morgan Securities Inc.
Needham & Company, Inc.
Neuberger & Berman
Northington Capital Markets, Inc.
The Ohio Company
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Parker/Hunter Incorporated
Piper Jaffray Inc.
The Principal/Eppler, Guerin & Turner, Inc.
Prudential Securities Incorporated
Ragen MacKenzie Incorporated
Rauscher Pierce Refsner, Inc.
Raymond James & Associates, Inc.
Robertson, Stephens & Company
The Robinson-Humphrey Company, Inc.
Rodman & Renshaw, Inc.
Scott & Stringfellow, Inc.
Seidler Amdec Securities Inc.
Muriel Siebert & Co. Inc.
Smith Barney, Harris Upham & Co. Incorporated
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Sturdivant & Co., Inc.
Sutro & Co. Incorporated
Tucker Anthony Incorporated
UBS Securities Inc.
S.G. Warburg & Co. Inc.
Wedbush Morgan Securities
Wertheim Schroder & Co. Incorporated
Wessels, Arnhold & Henderson
Wheat, First Securities, Inc.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
CCP Insurance, Inc.
2. Date of Purchase
9/22/93
3. Number of Securities Purchased
26,200
4. Dollar Amount of Purchase
$733,600
5. Price Per Unit
$28
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Merrill Lynch, Pierce, Fenner & Smith Incorporated
7. Other Members of the Underwriting Syndicate
Dean Witter Reynolds Inc.
Ladenburg, Thalmann & Co. Inc.
Bear, Stearns & Co. Inc.
The First Boston Corporation
Alex. Brown & Sons Incorporated
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
A.G. Edwards & Sons, Inc.
Goldman, Sachs & Co.
Lehman Brothers Inc.
Oppenheimer & Co., Inc.
Prudential Securities Incorporated
Salomon Brother Inc.
Smith Barney Shearson Inc.
S.G. Warburg & Co. Inc.
Sands Brothers & Co., Ltd.
RAS Securities Corp.
Advest, Inc.
J.C. Bradford & Co.
Conning & Company
Dain Bosworth Incorporated
First Manhattan Co.
Fox-Pitt, Kelton Inc.
Janney Montgomery Scott Inc.
Kemper Securities, Inc.
Legg Mason Wood Walker, Incorporated
McDonald & Company Securities, Inc.
Neuberger & Berman
Northington Capital Markets Inc.
Piper Jaffray Inc.
The Robinson-Humphrey Company, Inc.
Stephens Inc.
Wheat, First Securities, Inc.
Raffensperger, Hughes & Co., Inc.
Sterne, Agee & Leach, Inc.
Traub and Company, Inc.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Freeport-McMoran Copper & Gold Pfd "B"
2. Date of Purchase
8/5/93
3. Number of Securities Purchased
15,000
4. Dollar Amount of Purchase
$581,550
5. Price Per Unit
$38.77
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Lehman Brothers Inc.
7. Other Members of the Underwriting Syndicate
Goldman, Sachs & Co.
Kidder, Peabody & Co. Incorporated
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Bear, Stearns & Co. Inc.
The First Boston Corporation
Alex. Brown & Sons Incorporated
Dillon, Read & Co. Inc.
A.G. Edwards & Sons, Inc.
Kemper Securities, Inc.
Lazard Freres & Co.
Morgan Stanley & Co., Inc.
Oppenheimer & Co., Inc.
Prudential Securities Incorporated
Salomon Brother Inc.
Smith Barney Shearson Inc.
S.G. Warburg & Co. Inc.
Wertheim Schroder & Co. Incorporated
Dean Witter Reynolds Inc.
The Robinson-Humphrey Company, Inc.
Advest, Inc.
Robert W. Baird & Co. Incorporated
William Blair & Company
J.C. Bradford & Co.
Cowen & Company
Dain Bosworth Incorporated
Fahnestock & Co. Inc.
First of Michigan Corporation
Gruntal & Co., Incorporated
Janney Montgomery Scott Inc.
Ladenburg, Thalmann & Co. Inc.
Legg Mason Wood Walker, Incorporated
McDonald & Company Securities, Inc.
Piper Jaffray Inc.
Raymond James & Associates, Inc.
Stifel, Nicolaus & Company, Incorporated
Sutro & Co. Incorporated
Tucker Anthony Incorporated
Wheat, First Securities, Inc.
The Chicago Corporation
Crowell, Weedon & Co.
Dickinson & Co.
Doft & Co., Inc.
Dominick & Dominick, Incorporated
Ferris, Baker Watts, Incorporated
First Albany Corporation
Josephthal Lyon & Ross Incorporated
Laidlaw Equities, Inc.
The Ohio Company
Pennsylvania Merchant Group Ltd.
The Principal/Eppler, Guerin & Turner, Inc.
Ragen MacKenzie Incorporated
Rauscher Pierce Refsnes, Inc.
Rodman & Renshaw, Inc.
Roney & Co.
Scott & Stringfellow, Inc.
Wedbush Morgan Securities
Arthurs, Lestrange & Company Incorporated
Brean Murray, Foster Securities Inc.
JW Charles Securities, Inc.
Craigie Incorporated
Doley Securities, Inc.
First Southwest Company
Hamilton Investments, Inc.
J.J.B. Hilliard, W. L. Lyons, Inc.
C L King & Associates, Inc.
John G. Kinnard and Company, Incorporated
McGinn, Smith & Co., Inc.
Mesirow Financial, Inc.
Parker/Hunter Incorporated
Prime Charter Ltd.
Reich & Co., Inc.
Smith, Moore & Co.
Southwest Securities, Inc.
Sterne, Agee & Leach, Inc.
International Managers
Lehman Brothers International (Europe)
Goldman, Sachs International Limited
Kidder, Peabody International Limited
Merrill Lynch International Limited
ABN AMRO Bank N.V.
Banque Indosuez
Barclays de Zoete Wedd Limited
Burdett, Burkeridge & Young Limited
Burns Fry Limited
Carr Kitkat and Aitken Limited
Deutsche Bank Aktiengesellschaft
The Development Bank of Singapore Limited
NatWest Securities Limited
Nikko Europe Plc
NM Rothschild & Sons Limited
Societe Generale
Were Stockbroking Limited
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Industrie Natuzzi S.p.A. ADR
2. Date of Purchase
5/13/93
3. Number of Securities Purchased
75,000
4. Dollar Amount of Purchase
$1,125,000
5. Price Per Unit
$15
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
The First Boston Corporation
7. Other Members of the Underwriting Syndicate
Merrill Lynch International Limited
Banque Paribas
Cazenove & Co.
Credit Lyonnais Securities
Credito Italiano
Deutsche Bank Aktiengesellschaft
Kleinwort Benson Limited
S.G. Warburg Securities Ltd.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
TIG Holdings, Inc.
2. Date of Purchase
4/20/93
3. Number of Securities Purchased
6,100
4. Dollar Amount of Purchase
$138,013
5. Price Per Unit
$22.625
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Morgan Stanley & Co. Incorporated
7. Other Members of the Underwriting Syndicate
Donaldson, Lufkin & Jenrette Securities Corporation
Shearson Lehman Brothers Inc.
Advest, Inc.
Arnhold and S. Bleichroeder, Inc.
Robert W. Baird & Co.
M.R. Beal & Company
Bear, Stearns & Co. Inc.
Sanford C. Bernstein & Co., Inc.
William Blair & Company
J.C. Bradford & Co.
Brimberg & Co.
Alex. Brown & Sons Inc.
Burnham Securities Inc.
Conning & Company
Cowen & Company
Crowell, Weedon & Co.
Dain Bosworth Incorporated
Dillon, Read & Co., Inc.
Doft & Co., Inc.
A.G. Edwards & Sons, Inc.
Fahnestock & Co., Inc.
First Albany Corporation
The First Boston Corporation
First Manhattan Co.
First of Michigan Corporation
Folger Nolan Fleming Douglas Incorporated
Fox-Pitt, Kelton Inc.
Furman Selz Incorporated
Goldman Sachs & Co.
Gruntal & Co., Incorporated
Hambrecht & Quist Incorporated
J.J.B. Hilliard, W.L. Lyons, Inc.
Interstate/Johnson Lane Corporation
Janney Montgomery Scott Inc.
Johnston, Lemon & Co. Incorporated
Edward D. Jones & Co.
Kemper Securities Group, Inc.
Kidder, Peabody & Co. Incorporated
Ladenburg, Thalmann & Co. Inc.
C.J. Lawrence Inc.
Lazard Freres & Co.
Legg Mason Wood Walker Incorporated
McDonald & Company Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith Inc.
Montgomery Securities
Morgan Keegan & Company, Inc.
Needham & Company, Inc.
Neuberger & Berman
The Ohio Company
PaineWebber Incorporated
Parker/Hunter Incorporated
Paulsen, Dowling Securities, Inc.
Piper, Jaffray & Hopwood Incorporated
The Principal/Eppler, Guerin & Turner, Inc.
Prudential Securities Incorporated
Pryor McClendon, Counts & Co., Inc.
Ragen MacKenzie Incorporated
Rauscher Pierce Refsnes, Inc.
Raymond James & Associates, Inc.
Robertson, Stephens & Co.
The Robinson-Humphrey Company, Inc.
Roney & Co.
Rothschild Inc.
Salomon Brothers Inc.
SBCI Swiss Bank Corporation Investment Banking Inc.
Scott & Stringfellow Investment Corp.
Muriel Siebert & Co., Inc.
Smith Barney, Harris Upham & Co. Incorporated
Stephens Inc.
Sterne, Agee & Leach Inc.
Stifel, Nicolaus & Company Incorporated
Sutro & Co. Incorporated
Tucker Anthony Incorporated
Wasserstein Perella Securities, Inc.
Wedbush Morgan Securities
Wertheim Schroder & Co. Incorporated
Wheat, First Securities, Inc.
Dean Witter Reynolds Inc.
International Managers
Morgan Stanley International
Donaldson, Lufkin & Jenrette Securities Corporation
Daiwa Europe Limited
Swiss Bank Corporation
ABN AMRO Bank N.V.
Commerzbank Aktiengesellschaft
Dresdner Bank Aktiengesellschaft
Fox-Pitt, Kelton NV
Lehman Brothers International (Europe)
UBS Limited
BNP Capital Markets Limited
Barclays de Zoete Wedd Limited
Cazenove & Co.
Credit Lyonnais Securities
NatWest Securities Limited
Societe Generale
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
YPF Sociedad Anonima ADR
2. Date of Purchase
6/28/93
3. Number of Securities Purchased
12,500
4. Dollar Amount of Purchase
$237,500
5. Price Per Unit
$19
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
The First Boston Corporation
7. Other Members of the Underwriting Syndicate
Merrill Lynch, Pierce, Fenner & Smith Inc.
Goldman, Sachs & Co.
Salomon Brothers Inc.
Bear, Stearns & Co.
J. P. Morgan Securities Inc.
PaineWebber Incorporated
Alex. Brown & Sons Incorporated
BT Securities Corporation
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
A.G. Edwards & Sons, Inc.
Howard, Weil, Labouisse, Friedrichs Incorporated
Kidder, Peabody & Co. Incorporated
Lazard Freres & Co.
Morgan Stanley & Co., Inc.
Oppenheimer & Co., Inc.
Prudential Securities Incorporated
Shearson Lehman Brothers Inc.
Smith Barney, Harris Upham & Co. Inc.
Wertheim Schroder & Co. Incorporated
Dean Witter Reynolds Inc.
Baring Securities Inc.
Credit Lyonnais Securities (USA) Inc.
Deutsche Bank Capital Corporation
Kleinwort Benson North America Inc.
Nomura Securities International, Inc.
Paribas Corporation
Serfin Securities, Inc.
Smith New Court, Carl Marks Inc.
S.G. Warburg & Co. Inc.
Yamaichi International (America), Inc.
Advest, Inc.
Allen & Company Incorporated
Arnhold and S. Bleichroeder, Inc.
Robert W. Baird & Co. Incorporated
Sandford C. Bernstein & Co., Inc.
William Blair & Company
J.C. Bradford & Co.
Cowen & Company
Dain Bosworth Incorporated
Fahnestock & Co. Inc.
First Albany Corporation
First of Michigan Corporation
Gruntal & Co., Incorporated
Interstate/Johnson Lane Corporation
Invemed Associates, Inc.
Janney Montgomery Scott Inc.
Edward D. Jones & Co.
Kemper Securities, Inc.
Ladenburg, Thalmann & Co. Inc.
Legg Mason Wood Walker, Incorporated
Mabon Securities Corp.
McDonald & Company Securities, Inc.
Morgan Keegan & Company, Inc.
Needham & Company, Inc.
Neuberger & Berman
Petrie Parkman & Co., Inc.
Piper Jaffray Inc.
The Principal/Eppler, Guerin & Turner, Inc.
Ragen MacKenzie Incorporated
Rauscher Pierce Refsnes, Inc.
Raymond James & Associates, Inc.
The Robinson-Humphrey Company, Inc.
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Sutro & Co. Incorporated
Tucker Anthony Incorporated
Wheat, First Securities, Inc.
Baird, Patrick & Co., Inc.
The Chicago Corporation
Crowell, Weedon & Co.
Dominick & Dominick, Incorporated
Johnson Rice & Company
Johnston, Lemon & Co. Incorporated
Mesirow Financial, Inc.
The Ohio Company
Parker/Hunter Incorporated
Pennsylvania Merchant Group Ltd
Rodman & Renshaw, Inc.
Roney & Co.
Seidler Amdec Securities Inc.
Southcoast Capital Corporation
Utendahl Capital Partners, L.P.
Wedbush Morgan Securities
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Zaring Homes Inc.
2. Date of Purchase
5/25/93
3. Number of Securities Purchased
64,000
4. Dollar Amount of Purchase
$864,000
5. Price Per Unit
$13.50
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Dillon, Read & Co. Inc.
7. Other Members of the Underwriting Syndicate
McDonald & Company Securities, Inc.
Bear, Stearns & Co. Inc.
The First Boston Corporation
Alex Brown & Sons Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
A.G. Edwards & Sons, Inc.
Hambrecht & Quist Incorporated
Kidder, Peabody & Co. Incorporated
Lazard Freres & Co.
Merrill Lynch, Pierce, Fenner & Smith Inc.
Montgomery Securities
Morgan Stanley & Co., Inc.
Oppenheimer & Co., Inc.
Prudential Securities Incorporated
Robertson, Stephens & Company, L.P.
Shearson Lehman Brothers Inc.
Smith Barney, Harris Upham & Co. Incorporated
Wertheim Schroder & Co. Incorporated
William Blair & Company
Kemper Securities Group, Inc.
The Robinson-Humphrey Company, Inc.
Advest, Inc.
Robert W. Baird & Co.
J.C. Bradford & Co.
First Southwest Company
Interstate/Johnson Lane Corporation
Janney Montgomery Scott Inc.
Josephthal Lyon & Ross Incorporated
Ladenburg, Thalmann & Co. Inc.
Morgan Keegan & Company, Inc.
Needham & Company, Inc.
Neuberger & Berman
The Ohio Company
Rauscher Pierce Refsnes, Inc.
Raymond James & Associates, Inc.
Stephens Inc.
Wheat, First Securities, Inc.
Equitable Securitites Corporation
Fechtor, Detwiler & Co., Inc.
J.J.B. Hilliard, W.L. Lyons, Inc.
David A. Noyes & Company
Parker/Hunter Incorporated
Pennsylvania Merchant Group Ltd.
Roney & Co.
Unterberg Harris
H.G. Wellington & Co., Inc.
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Zurich Reinsurance Centre Holdings, Inc.
2. Date of Purchase
5/11/93
3. Number of Securities Purchased
28,700
4. Dollar Amount of Purchase
$1,004,500
5. Price Per Unit
$35
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
The First Boston Corporation
7. Other Members of the Underwriting Syndicate
Donaldson, Lufkin & Jenrette Securities Corporation
J.P. Morgan Securities Inc.
Smith Barney, Harris Upham & Co. Incorporated
Advest, Inc.
Allen & Company Incorporated
Arnhold and S. Bleichroeder, Inc.
Robert W. Baird & Co.
Baird, Patrick & Co., Inc.
The Bank of N.T. Butterfield & Son Limited
Bear, Stearns & Co. Inc.
Bermuda International Securities Limited
Sanford C. Bernstein & Co., Inc.
William Blair & Company
Alex Brown & Sons Inc.
The Chicago Corporation
Conning & Company
Cowen & Company
Dillon, Read & Co., Inc.
A.G. Edwards & Sons, Inc.
First Bermuda Securities Ltd.
First Manhattan Co.
Fox-Pitt, Kelton Inc.
Furman Selz Incorporated
Goldman Sachs & Co.
Invemed Associates, Inc.
Janney Montgomery Scott Inc.
Kemper Securities Group, Inc.
Kidder, Peabody & Co. Incorporated
Ladenburg, Thalmann & Co. Inc.
Lazard Freres & Co.
McDonald & Company Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith Inc.
Morgan Stanley & Co. Incorporated
Neuberger & Berman
Northington Capital Markets, Inc.
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Paulsen, Dowling Securities, Inc.
Prudential Securities Incorporated
RAS Securities Corp.
Raymond James & Associates, Inc.
The Robinson-Humphrey Company, Inc.
Salomon Brothers Inc.
Shearson Lehman Brothers Inc.
S.G. Warburg & Co. Inc.
Wertheim Schroder & Co. Incorporated
Wheat, First Securities, Inc.
Dean Witter Reynolds Inc.
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
The Paul Revere Corporation
2. Date of Purchase
10/26/93
3. Number of Securities Purchased
12,000
4. Dollar Amount of Purchase
$300,000
5. Price Per Unit
$25.00
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Salomon Brothers Inc.
7. Other Members of the Underwriting Syndicate
CS First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
Bear, Stearns & Co. Inc.
Alex. Brown & Sons Incorporated
Dillon, Read & Co. Inc.
A.G. Edwards & Sons. Inc.
Kidder, Peabody & Co. Incorporated
Lazard Freres & Co.
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Securities Inc.
Morgan Stanley & Co. Incorporated
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Prudential Securities Incorporated
Smith Barney Shearson Inc.
UBS Securities
S.G. Warburg & Co., Inc.
Wertheim Schroder & Co. Incorporated
Dean Witter Reynolds Inc.
The Chicago Dearborn Company
Allen & Company Incorporated
Conning & Company
Harris-Nesbitt Thomson Securities, Inc.
Kemper Securities, Inc.
Legg Mason Wood Walker, Incorporated
McDonald & Company Securities, Inc.
Raymond James & Associates, Inc.
RBC Dominion Securities Corporation
The Robinson-Humphrey Company, Inc.
Tucker Anthony Incorporated
Wood Gundy Corp. (Canada)
Advest, Inc.
Arnhold and S. Bleichroeder, Inc.
George K. Baum & Company
Sanford C. Bernstein & Co., Inc.
Fahnestock & Co. Inc.
First Albany Corporation
First Equity Corporation of Florida
First Manhattan Co.
Fox-Pitt, Kelton, Inc.
Furman Selz Incorporated
Interstate/Johnson Lane Corporation
Janney Montgomery Scott Inc.
C.J. Lawrence Inc.
Parker/Hunter Inc.
The Principal/Eppler, Guerin & Turner, Inc.
Ragen MacKenzie Incorporated
Adams, Harkness & Hill, Inc.
Branch, Cabell and Company
Cleary Gull Reiland McDevitt & Collopy, Inc.
Northington Partners Inc.
Paulsen, Dowling Securities, Inc.
Pryor, McClendon, Counts & Co.
Raffensperger, Hughes & Co., Inc.
S.B.S. Financial Group, Inc.
Carl P. Sherr & Co.
Smith, Moore & Co.
Sturdivant & Co., Inc.<PAGE>
For the fiscal year ended (a) April 30, 1994
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
AK Steel Holding Corporation
2. Date of Purchase
3/30/94
3. Number of Securities Purchased
75,000
4. Dollar Amount of Purchase
$1,762,500
5. Price Per Unit
$23.50
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
CS First Boston Corporation
7. Other Members of the Underwriting Syndicate
Advest, Inc.
Allen & Company Incorporated
Arnhold & S. Bleichroeder, Inc.
Robert W. Baird & Co. Incorporated
George K. Baum & Company
Bear, Stearns & Co. Inc.
William Blair & Company
J.C. Bradford & Co.
Brean Murray, Forster Securities Inc.
A.T. Brod & Co., Inc.
Alex. Brown & Sons Incorporated
The Buckingham Research Group Incorporated
The Chapman Company
The Chicago Corporation
Cowen & Company
Crowell, Weedon & Co.
Dain Bosworth Incorporated
Dean Witter Reynolds Inc.
Dillon, Read & Co. Inc.
A.G. Edwards & Sons, Inc.
Fahnestock & Co. Inc.
First Albany Corporation
First of Michigan Corporation
Furman Selz Incorporated
Goldman, Sachs & Co.
Hambrecht & Quist Incorporated
J.J.B. Hilliard, W.L. Lyons, Inc.
Interstate/Johnson Lane Corporation
Invemed Associates, Inc.
Janney Montgomery Scott Inc.
Edward D. Jones & Co.
Josephthal Lyon & Ross Incorporated
Kemper Securities, Inc.
Kidder, Peabody & Co. Incorporated
Ladenburg, Thalmann & Co. Inc.
C.J. Lawrence/Deutsche Bank Securities Corporation
Lazard Freres & Co.
Legg Mason Wood Walker Incorporated
Lehman Brothers Inc.
McDonald & Company Securities, Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Montgomery Securities
Morgan Keegan & Company, Inc.
Morgan Stanley & Co. Incorporated
NatWest Securities Limited
The Ohio Company
Oppenheimer & Co., Inc.
PaineWebber Incorporated
Parker/Hunter Incorporated
Pennsylvania Merchant Group Ltd.
Piper Jaffray Inc.
The Principal/Eppler, Guerin & Turner, Inc.
Prudential Securities Incorporated
Ragen MacKenzie Incorporated
Rauscher Pierce Refsnes, Inc.
Raymond James & Associates, Inc.
Robertson, Stephens & Company, L.P.
The Robinson-Humphrey Company, Inc.
Smith Barney Shearson Inc.
Stephens Inc.
Stifel, Nicolaus & Company, Incorporated
Sutro & Co. Incorporated
Tucker Anthony Incorporated
UBS Securities Inc.
Wedbush Morgan Securities
Wertheim Schorder & Co. Incorporated
Wheat, First Securities, Inc.<PAGE>
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
InfoSoft International, Inc.
2. Date of Purchase
3/01/94
3. Number of Securities Purchased
4,000
4. Dollar Amount of Purchase
$60,000
5. Price Per Unit
$15.00
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
CS First Boston Corporation
7. Other Members of the Underwriting Syndicate
Adams, Harkness & Hill, Inc.
L.H. Alton & Company
Brean Murray, Foster Securities Inc.
Alex. Brown & Sons Incorporated
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
First Albany Corporation
Gerard Klauer Mattison & Co., Inc.
Hambrecht & Quist Incorporated
Invemed Associates, Inc.
Josephthal Lyon & Ross Incorporated
Kemper Securities, Inc.
Kidder, Peadoby & Co. Incorporated
C.J. Lawrence/Deutsche Bank Securities Corporation
Legg Mason Wood Walker Incorporated
Lehman Brothers Inc.
Mabon Securities Corp.
Montgomery Securities
Morgan Stanley & Co. Incorporated
Needham & Company, Inc.
Pennsylvania Merchant Group Ltd.
Prudential Securities Incorporated
Punk, Ziegel & Knoell
Raymond James & Associates, Inc.
Robertson, Stephens & Company, L.P.
Rothschild Inc.
Sutro & Co. Incorporated
Trilon Securities International
Tucker Anthony Incorporated
Wessels, Arnold & Henderson<PAGE>
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Northwest Airlines Corporation
2. Date of Purchase
3/17/94
3. Number of Securities Purchased
100,000
4. Dollar Amount of Purchase
$1,300,000
5. Price Per Unit
$13.00
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Lehman Brothers Inc.
7. Other Members of the Underwriting Syndicate
BT Securities Corporation
CS First Boston Corporation
Salomon Brothers Inc.
Smith Barney Shearson, Inc.
Bear, Stearns & Co. Inc.
Alex. Brown & Sons Incorporated
Dean Witter Reynolds Inc.
Dillon, Read & Co. Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
A.G. Edwards & Sons, Inc.
Goldman, Sachs & Co.
Kemper Securities, Inc.
Kidder, Peabody & Co. Incorporated
Lazard Freres & Co.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Montgomery Securities
Morgan Stanley & Co. Incorporated
PaineWebber Incorporated
Prudential Securities Incorporated
Wertheim Schroder & Co. Incorporated
Piper Jaffray Inc.
Crowell, Weedon & Co.
Doft & Co., Inc.
Fahnestock & Co. Inc.
First of Michigan Corporation
Gruntal & Co. Incorporated
Morgan Keegan & Company, Inc.
The Robinson-Humphrey Company, Inc.
Scott & Stringfellow, Inc.
Stifel, Nicolaus & Company, Incorporated
Sutro & Co. Incorporated
Wessels, Arnold & Henderson
Brean Murray, Foster Securities Inc.
D.A. Davidson & Co. Incorporated
Doley Securities, Inc.
John G. Kinnard and Company, Incorporated
Pennsylvania Merchant Group Ltd.
Pryor, McClendon, Counts & Co., Inc.
Ragen MacKenzie Incorporated
Roney & Co.
Unterberg Harris<PAGE>
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Societe Nationale Elf Aquitaine ADR
2. Date of Purchase
2/14/94
3. Number of Securities Purchased
4,400
4. Dollar Amount of Purchase
$151,142
5. Price Per Unit
$34.35
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Merrill Lynch
7. Other Members of the Underwriting Syndicate
Banque Paribas
Credit Lyonnais
Merrill Lynch International Limited
Banque Nationale de Paris
Banque Indosuez
UBS S.A. Maison de Titres
Credit Commercial de France
Daiwa Europe Limited
Deutsche Bank France SNC
Goldman Sachs International Limited
Morgan Stanley S.A.
Societe Generale
Banque S.G. Warburg
Caisse des Depots et Consignations
Donaldson, Lufkin & Jenrette Securities Corporation
Caisse Nationale de Credit Agricole
Rothschild et Cie Banque and
NM Rothschild & Sons Limited (acting jointly)
Lazard Freres & Cie
Barclays de Zoete Wedd Limited
J.P. Morgan & Cie S.A.
Banque Nomura France
Compagnie Financiere de CIC et de I'Union Europeenne-
J. Henrey Schroeder Wagg & Co. Limited
RBC Dominion Securities Inc.
Banque Worms
CS First Boston France S.A.
Dresdner Bank Aktiengesellschaft
ABN AMRO Bank N.V.
Societe de Banque Suisse (France) S.A.
Bear Stearns International Limited
Caisse Centrale Des Banques Populaires
Enskilda Corporate
Skandinaviska Enskilada Banken
HSBC Investment Banking Group Limited
Kleinwort Benson Limited
Lehman Brothers International (Europe)
Nikko Europe Plc
PaineWebber International (U.K.) Ltd.
Prudential Securities Incorporated
Salomon Brothers Inc.
Smith Barney Shearson Inc.
Yamaichi International (Europe) Limited
Banco Central Hispanoamericano S.A.
Banque du Louvre
Banque Pallas Stern
CPR Compagnie Parisienne de Reescompte
La Compagnie Financiere Edmond de Rothschild Banque
Union de Garantie et de Placement<PAGE>
For the fiscal year ended (a) 4/30/94
File number (c) 811-6047
SUB-ITEM 77 0
EXHIBITS
Transactions Effected Pursuant to Rule 10f-3
1. Name of Issuer
Instituto Mobiliare Italiano
2. Date of Purchase
2/09/94
3. Number of Securities Purchased
21,600
4. Dollar Amount of Purchase
$415,589
5. Price Per Unit
$19.24
6. Name(s) of Underwriter(s) or Dealer(s)
From whom Purchased
Morgan Stanley & Co.
7. Other Members of the Underwriting Syndicate
CS First Boston Corporation
S.G. Warburg & Co. Inc.
Bear, Stearns & co. Inc.
Donaldson Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
Keefe, Bruyette & Woods, Inc.
Kleinwort Benson North America Inc.
C.J. Lawrence/Deutsche Bank Securities Corporation
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
J.P. Morgan Seucrities Inc.
Nomura Securities International, Inc.
Oppenheimer & Co., Inc.
Prudential Securities Incorporated
Salomon Brothers Inc.
Smith Barney Shearson Inc.
Arnhold & S. Bleichroeder, inc.
Sanford C. Bernstein & Co., Inc.
Fox-Pitt, Kelton Inc.
Janney Montgomery Scott Inc.
Board of Directors or Trustees of:
Prudential Adjustable Rate Securities Fund
The BlackRock Government Income Trust
Prudential California Municipal Fund
Prudential Equity Fund
Prudential Equity Income Fund
Prudential FlexiFund (2 Portfolios)
Prudential GNMA Fund
Prudential Global Fund
Prudential Global Genesis Fund
Prudential Global Natural Resources Fund
Prudential Government Plus Fund
Prudential Growth Fund
Prudential Growth Opportunity
Prudential High Yield Fund
Prudential IncomeVertible Fund
Prudential Intermediate Global Income Fund
Prudential Multi-Sector Fund
Prudential Municipal Bond Fund (3 Portfolios)
Prudential Municipal Series Fund (11 Portfolios)
Prudential National Municipals Fund
Prudential Pacific Growth Fund
Prudential Short-Term Global Income Fund (2 Portfolios)
Prudential Strategic Income Fund
Prudential Structured Maturity Fund
Prudential U.S. Government Fund
Prudential Utility Fund
Global Utility Fund, Inc.
Nicholas-Appelgate Fund, Inc.
We have examined the accompanying description of the Prudential Dual Pricing
Worksheet (the "Worksheet") application of State Street Bank and Trust Company
("State Street"), custodian and recordkeeper for the Prudential Mutual Funds
(the "Funds"). Our examination included procedures to obtain reasonable
assurance about whether (1) the accompanying description presents fairly, in
all material respects, the aspects of State Street's policies and procedures
that may be relevant to a Fund's internal control structure relating to the
Worksheet, (2) the control structure policies and procedures included in the
description were suitably designed to achieve the control objectives specified
in the description, if those policies and procedures were complied with
satisfactorily, and (3) such policies and procedures had been placed in
operation as of June 30, 1993. The control objectives were specified by
Prudential Mutual Fund Management. Our examination was performed in accordance
with standards established by the American Institute of Certified Public
Accountants and included those procedures we considered necessary in the
circumstances to obtain a reasonable basis for rendering our opinion.
In our opinion, the accompanying description of the aforementioned application
presents fairly, in all material respects, the relevant aspects of State
Street's policies and procedures that had been placed in operation as of June
30, 1993. Also, in our opinion, the policies and procedures, as described, are
suitably designed to provide reasonable assurance that the specified control
objectives would be achieved if the described policies and procedures were
complied with satisfactorily.
In addition to the procedures we considered necessary to render our opinion as
expressed in the previous paragraph, we applied tests to specific policies and
procedures, listed in Section I, to obtain evidence about their effectiveness
in meeting the control objectives, described in Section I during the period
from July 1, 1992 to June 30, 1993. The nature, timing, extent, and results of
the tests are listed in Section II. In our opinion the policies and procedures
that were tested, as described in Section II, were operating with sufficient
effectiveness to provide reasonable, but not absolute, assurance that the
control objectives specified in Section I were achieved during the period from
July 1, 1992 to June 30, 1993.
The relative effectiveness and significance of specific policies and procedures
at State Street, and their effect on assessments of control risk on the Funds
are dependent on their interaction with the policies, procedures, and other
factors present at individual Funds. We have performed no procedures to
evaluate the effectiveness of policies and procedures an individual Funds in
connection with this report.
The description of policies and procedures at State Street is as of June 30,
1993, and information about tests of the operating effectiveness of specified
policies and procedures covers the period from July 1, 1992 to June 30, 1993.
Any projection of such information to the future is subject to the risk that,
because of change, the description may no longer portray the system in
existence. The potential effectiveness of specified policies and procedures at
State Street is subject to inherent limitations and, accordingly, errors or
irregularities may occur and not be detected. Furthermore, the projection of
any conclusions, based on our findings, to future periods is subject to the
risk that changes may alter the validity of such conclusions.
This report is intended solely for use by the management and Boards of
Directors/Trustees of the Funds, the independent auditors of the Funds and the
Securities and Exchange Commission.
DELOITTE & TOUCHE
August 13, 1993
SECTION I
Policies and Procedures Placed in Operation
Prudential Dual Pricing Worksheet
Effective January 22, 1990, the Funds, offered by Prudential Securities
Incorporated (formerly Prudential-Bache Securities, Inc.) and Prudential Mutual
Fund Distributors, Inc., adopted a dual pricing system. The dual pricing
system consists of two classes of shares (Class A and Class B) for the Funds.
The Class A shares are subject to a front-end sales load and the Class B shares
are subject to a contingent deferred sales charge. The two classes of shares
represent interests in the same portfolio of investments of the respective Fund
and are identical in all respects, except that each class is subject to
different distribution expenses and has exclusive voting rights with respect to
the Rule 12b-1 distribution plan pursuant to which such distribution expenses
are paid.
In order to allocate income and expenses between the two classes of shares,
State Street Bank and Trust Company (the Funds' custodian and recordkeeper)
utilizes the Prudential Dual Pricing Worksheet (the "Worksheet") (see Exhibit
I). The Worksheet is a manual supplementary application that extracts relevant
data from the Funds' primary accounting system, allocates income and expenses
between the two classes of shares and computes the daily net asset value and,
if applicable, the dividend/distribution for each class of shares. Internal
accounting controls that are relevant to the Fund can be divided into two
components - controls related to the mutual fund accounting system resident at
State Street Bank and Trust Company (the "primary accounting system") and
controls related to the Worksheet.
The specific control objectives and policies and procedures relating to the
Worksheet are described on pages 4 and 5. A description of the tests of the
policies and procedures designed to obtain evidence about the operating
effectiveness of those policies and procedures in achieving the specific
control objectives is included in Section II.
Control Objectives and Policies and Procedures
Prudential Dual Pricing Worksheet
The Worksheet is a supplementary manual application to the Funds' primary
accounting system. Certain data is extracted from the primary accounting
system to allocate income and expenses and to calculate the daily net asset
value and, if applicable, dividends/distributions for each class of shares.
The primary accounting system includes the details of transactions in
accordance with the Investment Company Act of 1940, as amended.
The following represents the internal accounting control objectives and
policies and procedures for the allocation of income and expenses and the
computation of the net asset value and, if applicable, the
dividend/distribution for each class of shares utilizing the Worksheet. It
does not cover the internal accounting control policies and procedures
surrounding the processing of information into the Funds' primary accounting
system.
CONTROL OBJECTIVES CONTROL POLICIES AND PROCEDURES
A. Capital share activity 1. Daily, the transfer agent forwards
as reported by the Fund's reports of capital share capital share
transfer agent is recorded activity for each class which includes
for each class in an accurate a summary of subscriptions,
and timely manner by the fund. redemptions, exchanges and other
information (the "Supersheet"). The
opening day's balance for shares
outstanding and for shares eligible for
dividends are recorded on the
Worksheet. shares eligible for
dividends are recorded on
2. Estimated interim share activity
for the current day not recorded in the
Supersheet is received via telefax from
the transfer agent and is recorded for
each class on the Worksheet.
B. Net Asset Value ("NAV") 1. The prior days ending NAV per
and, if applicable, the share (unrounded) for each class is
dividend/distribution for agreed to the prior day's Worksheet.
each class are accurately
computed on a daily basis. 2. The daily net capital stock
activity for each class for the current
day is agreed to the Supersheet as
described in Control Procedures A.1 and
2., above.
3. Percentage Assets by Class and
Percentage Dividend Assets by Class are
calculated for each class based upon
information from the prior day
Worksheet and information recorded on
the Supersheet.
CONTROL OBJECTIVES CONTROL POLICIES AND PROCEDURES
4. Allocate investment income between
classes based on the appropriate asset
allocation percentage for each class.
5. Agree composite dividend income,
interest income, income amortization,
income equalization, management fees,
other expenses, realized gains and
losses, and unrealized
appreciation/depreciation to the
primary accounting system of the Fund.
6. Allocate expenses between classes
as follows:
a. Expenses directly
attributable to each class (12b-1
distribution expenses) are calculated
and recorded to that class.
b. Expenses attributable to both
classes are allocated in accordance
with the appropriate asset allocation
percentage for each class.
7. Allocate realized and
unrealized gains and losses between the
classes in accordance with the
appropriate asset allocation percentage
of each class.
8. Record dividends/distributions to
shareholders of each class in the
primary accounting system.
9. Aggregate the net assets for each
class and agree to the total net assets
per the primary accounting system.
10. For each class, reconcile the
current day's NAV and, if applicable,
the dividend/distribution to the
previous day's NAV and
dividend/distribution for each class.
11. The above procedures are reviewed
by the Fund supervisor or manager.
SECTION II
Tests of Operating Effectiveness
Prudential Dual Pricing Worksheet
July 1, 1992 to June 30, 1993
We reviewed the methodology and procedures for calculating the daily net asset
value and, if applicable, the dividends/distributions of the two classes of
shares and the allocation of income and expenses between the two classes of
shares.
The following are the detailed procedures which we performed with respect to
the Worksheet. These procedures were performed for selected days encompassing
all Funds subject to dual pricing during the year ended June 30, 1993, which we
believe is a representative sample, to test compliance with the control
policies and procedures as described in Section I.
Prudential Mutual Fund Management, Inc. is the manager of the Funds and has
represented to us that adequate facilities are in place to ensure
implementation of the methodology and procedures for calculating the net asset
value and dividends/distributions of the two classes of shares and the
allocation of income and expenses between the two classes of shares. Based on
our review of the description of the policies and procedures of the Worksheet,
as described in Section I, and performance of tests of operating effectiveness
as described in Section II, we concur with such representation.
Agreed "Prior Day NAV Per Share" to the previous day's Worksheet and
to the rounded NAV included on the Supersheet for each class.
Agreed "Shares Outstanding Beginning of the Day" to the Supersheet
for each class.
Agreed "Activity/Estimate" to the estimated interim share activity
reported via fax from the transfer agent for each class.
Recalculated "Current Shares Outstanding" by adding "Shares
Outstanding Beginning of the Day" and "Activity/Estimate" for each
class.
Recalculated for each class "Adjusted Total Assets" by multiplying
"Prior Day NAV Per Share" by "Current Shares Outstanding."
Recalculated "Percentage Assets-Class A/Front End" by dividing
"Adjusted Total Assets-Class A/Front End" by "Adjusted Total Assets
Composite."
Recalculated "Percentage Assets-Class B/Back End" by dividing
"Adjusted Total Assets-Class B/Back End" by "Adjusted Total Assets
Composite."
Agreed "Dividend Shares Beginning of Day" to the Supersheet for each
class.
Agreed "Activity/Estimate" to the estimated interim share activity
reported via fax from the transfer agent for each class.
Recalculated "Current Dividend Shares" by adding "Dividend Shares
Beginning of Day" and "Activity/Estimate" for each class.
Recalculated for each class "Adjusted Dividend Assets" by multiplying
"Prior Day NAV Per Share" by "Current Dividend Shares."
Recalculated "Percentage Dividend Assets-Class A/Front End" by
dividing "Adjusted Dividend Assets-Class A/Front End" by "Adjusted
Dividend Assets Composite."
Recalculated "Percentage Dividend Assets-Class B/Back End" by
dividing "Adjusted Dividend Assets-Class B/Back End" by "Adjusted
Dividend Assets Composite."
Agreed composite total "Dividend Income", "Interest Income",
"Amortization" and "Income Equalization" to the primary accounting
system.
Recalculated the allocation for each class of "Dividend Income",
"Interest Income" and "Amortization" for daily dividend funds by
multiplying the composite total by "Percentage Dividend Assets-Class
A/Front End" and "Percentage Dividend Assets-Class B/Back End," and
for non-daily dividend funds by multiplying the composite total by
"Percentage Assets-Class A/Front End" and "Percentage Assets-Class
B/Back End."
Recalculated "Daily Income", composite and for each class, by
totaling "Dividend Income", "Interest Income", "Amortization" and
"Income Equalization."
Agreed composite total "Management Fee" and "Other Fixed Expenses" to
the primary accounting system.
Recalculated the allocation for each class of "Management Fee" and
"Other Fixed Expenses" for daily dividend funds by multiplying the
composite total by "Percentage Dividend Assets-Class A/Front End" and
"Percentage Dividend Assets-Class B/Back End," and non-daily dividend
funds by multiplying the composite total by "Percentage Assets-Class
A/Front End" and "Percentage Assets-Class B/Back End."
Agreed the "12b-1 Fee-Class A/Front End" and "12b-1 Fee-Class B/Back
End" to the respective "PC Expense Worksheet."
Recalculated "Daily Expense", composite and for each class, by
totaling "Management Fee", "12b-1 Fee" and "Other Fixed Expenses."
Recalculated "Daily Net Income" for each class by subtracting "Daily
Expense" from "Daily Income."
Recalculated "Dividend Rate" for each class for daily dividend funds
by dividing "Daily Net Income" by "Dividend Shares Beginning of
Day-Class A/Front End" and "Dividend Shares Beginning of Day-Class
B/Back End."
Agreed "Daily Income" and "Income Distribution" for each class to the
primary accounting system.
Recalculated "Undistributed Net Income" for each Class by subtracting
"Income Distribution" from "Income Available for Distribution."
Agreed "Capital Stock Activity" for each Class to the Supersheet.
Agreed the "Capital Gain Distribution" to the amount recorded in the
primary accounting system.
Agreed composite total "Realized Gain/Loss", "Unrealized
Appreciation/Depreciation", "Unrealized Appreciation/Depreciation -
Options" and "Unrealized Appreciation/Depreciation - Futures" to the
primary accounting system.
Recalculated the allocation for each class of "Realized Gain/Loss",
"Unrealized Appreciation/Depreciation", "Unrealized
Appreciation/Depreciation - Options" and "Unrealized
Appreciation/Depreciation - Futures" by multiplying the composite
amount by the "Percentage Assets-Class A/Front End" and "Percentage
Assets-Class B/Back End."
Agreed "Prior Days Net Assets" to the previous day's Worksheet.
Recalculated "Net Assets", composite and for each class, by totaling
"Undistributed Net Income", "Capital Stock Activity", "Capital Gain
Distribution", "Realized Gain/Loss", "Unrealized
Appreciation/Depreciation", "Unrealized Appreciation/Depreciation -
Options", "Unrealized Appreciation/Depreciation - Futures", and
"Prior Days Net Assets."
Recalculated "NAV Per Share" dividing the "Net Assets-Class A/Front
End" and "Net Assets - Class B/Back End" by "Current Shares
Outstanding - Class A/Front End" and 'Current Shares Outstanding -
Class B/Back End", respectively.
Recalculated "Offering Price" for Class A shares by applying the
"Load" percentage as stated in the fund's prospectus.
Board of Directors
Prudential Multi-Sector Fund, Inc.
In planning and performing our audit of the financial statements of Prudential
Multi-Sector Fund, Inc. ("Fund") for the year ended April 30, 1994, we
considered its internal control structure, including procedures for safeguarding
securities, in order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with the
requirements of Form N-SAR, not to provide assurance on the internal control
structure.
The management of the Fund is responsible for establishing and maintaining an
internal control structure. In fulfilling this responsibility, estimates and
judgments by management are required to assess the expected benefits and related
costs of internal control structure policies and procedures. Two of the
objectives of an internal control structure are to provide management with
reasonable, but not absolute, assurance that assets are safeguarded against loss
from unauthorized use or disposition and that transactions are executed in
accordance with management's authorization and recorded properly to permit
preparation of financial stat ements in conformity with generally accepted
accounting principles.
Because of inherent limitations in any internal control structure, errors or
irregularities may occur and not be detected. Also, projection of any
evaluation of the structure to future periods is subject to the risk that it may
become inadequate because of changes in conditions or that the effectiveness of
the design and operation may deteriorate.
Our consideration of the internal control structure would not necessarily
disclose all matters in the internal control structure that might be material
weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in which the
design or operation of the specific internal control structure elements does not
reduce to a relatively low level the risk that errors or irregularities
in amounts that would be material in relation to the financial statements being
audited may occur and not be detected within a timely period by employees in the
normal course of performing their assigned functions. However, we noted no
matters involving the internal control structure, including procedures for
safeguarding securities, that we consider to be material weaknesses as defined
above as of April 30, 1994.
This report is intended solely for the information and use of management and the
Securities and Exchange Commission.
DELOITTE & TOUCHE
June 16, 1994
