PRUDENTIAL PACIFIC GROWTH FUND INC, 485APOS, 1995-11-02

PRUDENTIAL PACIFIC GROWTH FUND INC
485APOS, 1995-11-02

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON NOVEMBER 2, 1995

REGISTRATION NOS. 33-42391
811-6391

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

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

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

PRE-EFFECTIVE AMENDMENT NO. / /

POST-EFFECTIVE AMENDMENT NO. 6 [X]

AND/OR

REGISTRATION STATEMENT UNDER THE

INVESTMENT COMPANY ACT OF 1940 [X]

AMENDMENT NO. 8

(Check appropriate box or boxes)

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

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

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

S. JANE ROSE, ESQ.
ONE SEAPORT PLAZA
NEW YORK, NEW YORK 10292

(Name and Address of Agent for Service)

APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING: As soon as practicable after
the effective date of the Registration Statement.

IT IS PROPOSED THAT THIS FILING WILL BECOME EFFECTIVE (CHECK APPROPRIATE BOX):

/ / immediately upon filing pursuant to paragraph (b)

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

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

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

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

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

IF APPROPRIATE, CHECK THE FOLLOWING BOX:

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

PURSUANT TO RULE 24F-2 UNDER THE INVESTMENT COMPANY ACT OF 1940, REGISTRANT
HAS PREVIOUSLY REGISTERED AN INDEFINITE NUMBER OF SHARES OF ITS COMMON STOCK,
PAR VALUE $.001 PER SHARE. THE REGISTRANT WILL FILE A NOTICE UNDER SUCH RULE FOR
ITS FISCAL YEAR ENDED OCTOBER 31, 1995 ON OR ABOUT DECEMBER 29, 1995.

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

<TABLE><CAPTION>
N-1A ITEM NO. LOCATION
- --------------------------------------------------- ---------------------------------------
<S> <C> <C>
PART A
Item 1. Cover Page............................. Cover Page

Item 2. Synopsis............................... Fund Expenses; Fund Highlights

Item 3. Condensed Financial Information........ Fund Expenses; Financial Highlights;
How the Fund Calculates Performance

Item 4. General Description of Registrant...... Cover Page; Fund Highlights; How the
Fund Invests; General Information

Item 5. Management of the Fund................. Financial Highlights; How the Fund is
Managed

Item 6. Capital Stock and Other Securities..... Taxes, Dividends and Distributions;
General Information

Item 7. Purchase of Securities Being Offered... Shareholder Guide; How the Fund Values
its Shares

Item 8. Redemption or Repurchase............... Shareholder Guide; How the Fund Values
its Shares

Item 9. Pending Legal Proceedings.............. Not Applicable

PART B
Item Cover Page............................. Cover Page
10.

Item Table of Contents...................... Table of Contents
11.

Item General Information and History........ General Information
12.

Item Investment Objectives and Policies..... Investment Objective and Policies;
13. Investment Restrictions

Item Management of the Fund................. Directors and Officers; Manager;
14. Distributor

Item Control Persons and Principal Holders
15. of Securities........................ Not Applicable

Item Investment Advisory and Other
16. Services............................... Manager; Distributor; Custodian,
Transfer and Dividend Disbursing
Agent and Independent Accountants

Item Brokerage Allocation and Other
17. Practices.............................. Portfolio Transactions and Brokerage

Item Capital Stock and Other Securities..... Not Applicable
18.

Item Purchase, Redemption and Pricing of
19. Securities Being Offered............... Purchase and Redemption of Fund Shares;
Shareholder Investment Account; Net
Asset Value

Item Tax Status............................. Taxes
20.

Item Underwriters........................... Distributor
21.

Item Calculation of Performance Data........ Performance Information
22.

Item Financial Statements................... Financial Statements
23.
</TABLE>

PART C

Information required to be included in Part C is set forth under the
appropriate Item, so numbered, in Part C to this Post-Effective Amendment to
the Registration Statement.

<PAGE>

Prudential Pacific Growth Fund, Inc.
Class Z Shares
- --------------------------------------------------------------------------------

PROSPECTUS DATED JANUARY 2, 1996

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

Prudential Pacific Growth Fund, Inc. (the Fund) is an open-end, diversified
management investment company whose objective is long-term growth of capital.
The Fund seeks to achieve this objective by investing primarily in common
stocks, common stock equivalents (such as convertible debt securities and
warrants) and other securities of companies doing business in or domiciled in
the Pacific Basin region. Under normal circumstances, the Fund intends to
invest at least 65% of its total assets in such securities. The Fund may
invest in equity securities of other companies and in non-convertible debt
securities and options on stocks, stock indices, foreign currencies and
futures contracts on foreign currencies and may purchase and sell futures
contracts on foreign currencies and groups of currencies and on financial or
stock indices so as to hedge its portfolio and to attempt to enhance return.
See "How the Fund Invests--Investment Objective and Policies." There can be
no assurance that the Fund's investment objective will be achieved. The
Fund's address is One Seaport Plaza, New York, New York l0292, and its
telephone number is (800) 225-1852.

The Fund is not intended to constitute a complete investment program. Because of
its objective and policies, including its Pacific Basin orientation, the Fund is
subject to greater investment risks than certain other mutual funds. See "How
the Fund Invests--Risks and Special Considerations of Investing in Foreign
Securities" and "Portfolio Turnover."

Class Z shares are offered exclusively for sale to the Trustee of the Prudential
Securities 401(k) Plan, a defined contribution plan sponsored by Prudential
Securities Incorporated (the PSI 401(k) Plan or the Plan). Only Class Z shares
are offered through this Prospectus. The Fund also offers Class A, Class B and
Class C shares through the attached Prospectus dated January 3, 1995 (the Retail
Class Prospectus) which is a part hereof.

This Prospectus sets forth concisely the information about the Fund that a
prospective investor should know before investing. Additional information about
the Fund has been filed with the Securities and Exchange Commission in a
Statement of Additional Information, dated January 3, 1995, which information is
incorporated herein by reference (is legally considered a part of this
Prospectus) and is available without charge upon request to the Fund, at the
address or telephone number noted above.

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

Investors are advised to read this Prospectus and retain it for future
reference.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

<PAGE>

FUND EXPENSES

<TABLE><CAPTION>
CLASS Z SHARES
----------------
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Maximum Sales Load Imposed on Purchases (as a percentage of offering
price)...................................................................... None
Maximum Sales Load or Deferred Sales Load Imposed on Reinvested
Dividends................................................................... None
Deferred Sales Load (as a percentage of original purchase price or
redemption proceeds, whichever is lower)................................ None
Redemption Fees.......................................................... None
Exchange Fee............................................................. None

CLASS Z SHARES*
----------------
<S> <C>
ANNUAL FUND OPERATING EXPENSES
(as a percentage of average net assets):
Management Fees.......................................................... .75%
12b-1 Fees............................................................... None
Other Expenses........................................................... .51%
----------------
Total Fund Operating Expenses............................................ 1.26%
----------------
----------------
</TABLE>

<TABLE><CAPTION>
EXAMPLE 1 3 5 10
- -------
YEAR YEARS YEARS YEARS
------- ------- ------- -------

<S> <C> <C> <C> <C>
You would pay the following expenses on a $1,000
investment, assuming (1) 5% annual return and (2)
redemption at the end of each time period:
Class Z*............................................. $ 13 $ 40 $ 69 $152
</TABLE>

The above example is based on expenses expected to have been incurred if
Class Z shares had been in existence during the fiscal year ended October
31, 1995. The example should not be considered a representation of past or
future expenses. Actual expenses may be greater or less than those shown.

The purpose of this table is to assist investors in understanding the
various costs and expenses that an investor in Class Z shares of the Fund
will bear, whether directly or indirectly. For more complete descriptions of
the various costs and expenses, see "How the Fund is Managed." "Other
Expenses" includes operating expenses of the Fund, such as directors' and
professional fees, registration fees, reports to shareholders, transfer
agency and custodian fees and franchise taxes.

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

* Estimated based on expenses expected to have been incurred if Class Z
shares had been in existence during the fiscal year ended October 31,995.

2
<PAGE>

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

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

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

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

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

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

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

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

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

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

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

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

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

3
<PAGE>

Prudential Pacific Growth Fund, Inc.

SUPPLEMENT DATED JANUARY 2, 1996 TO
PROSPECTUS DATED JANUARY 3, 1995

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

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

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

<TABLE><CAPTION>
CLASS A CLASS B CLASS C
---------- ---------- ----------
SIX MONTHS SIX MONTHS SIX MONTHS
ENDED ENDED ENDED
APRIL 30, APRIL 30, APRIL 30,
1995** 1995** 1995**
---------- ---------- ----------

<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of period................. $ 16.90 $ 16.62 $16.62

INCOME FROM INVESTMENT OPERATIONS
Net investment income (loss)......................... .02 (.04) (.04)
Net realized and unrealized gain (loss) on investment
and foreign currency transactions.................... (1.78) (1.74) (1.74)
---------- ---------- -----
Total from investment operations..................... (1.76) (1.78) (1.78)
---------- ---------- -----

LESS DISTRIBUTIONS
Dividends in excess of net investment income......... -- -- --
Distributions from net realized gains................ (.10) (.10) (.10)
---------- ---------- -----
Total distributions.................................. (.10) (.10) (.10)
---------- ---------- -----
Net asset value, end of period....................... $ 15.04 $ 14.74 $14.74
---------- ---------- -----
---------- ---------- -----

TOTAL RETURN#:....................................... (10.40)% (10.70)% (10.70)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)...................... $106,687 $355,035 $1,101
Average net assets (000)............................. $ 94,189 $379,515 $1,048
Ratios to average net assets:
Expenses, including distribution fees............. 1.51%* 2.26%* 2.26%*
Expenses, excluding distribution fees............. 1.26%* 1.26%* 1.26%*
Net investment income (loss)...................... .14%* (.61)%* (.44)%*
Portfolio turnover................................... 31% 31% 31%
</TABLE>

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

* Annualized.

** Calculated based upon weighted average shares outstanding during the
period.

# Total return does not consider the effects of sales loads. Total return is
calculated assuming a purchase of shares on the first day and a sale on
the last day of each period reported and includes reinvestment of
dividends and distributions. Total returns for periods of less than a full
year are not annualized.

<PAGE>

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

The Fund is authorized to offer 2 billion shares of common stock, $.001 par
value per share, divided into four classes of shares, designated Class A, Class
B, Class C and Class Z shares, each consisting of 500 million authorized shares.
Each class represents an interest in the same assets of the Fund and is
identical in all respects except that (i) each class is subject to different
sales charges and distribution and/or service fees (except for Class Z shares,
which are not subject to any distribution and/or service fee), (ii) each class
has exclusive voting rights on any matter submitted to shareholders that relates
solely to its arrangement and has separate voting rights on any matter submitted
to shareholders in which the interests of one class differ from the interests of
any other class, (iii) each class has a different exchange privilege, (iv) only
Class B shares have a conversion feature and (v) Class Z shares are not subject
to any sales or redemption charge and are offered exclusively for sale to the
Trustee of the Prudential Securities 401(k) Plan, a defined contribution plan
sponsored by Prudential Securities. Since Class B and Class C shares generally
bear higher distribution expenses than Class A shares, the liquidation proceeds
to shareholders of those classes are likely to be lower than to Class A
shareholders and to Class Z shareholders, whose shares are not subject to any
distribution and/or service fee. In accordance with the Fund's Articles of
Incorporation, the Board of Directors may authorize the creation of additional
series and classes within such series, with such preferences, privileges,
limitations and voting and dividend rights as the Directors may determine.
Currently, the Fund is offering four classes, designated Class A, Class B, Class
C and Class Z shares.

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

The Fund will include performance data for each class of shares offered
through the Prospectus in any advertisement or information including performance
data of the Fund.

2
<PAGE>

Prudential Pacific Growth Fund, Inc.

SUPPLEMENT DATED JANUARY 2, 1996 TO
STATEMENT OF ADDITIONAL INFORMATION DATED
JANUARY 3, 1995

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

As of October 13, 1995, the Directors and officers of the Fund, as a group,
owned less than 1% of the outstanding common stock of the Fund.

As of October 13, 1995: Barry S. Cohn TTEE, Barry S. Cohn MPP Plan DTD
01/01/86, FBO Barry S. Cohn, 2505 Astor Court, Glenview, Illinois owned 16,539
Class C shares (approximately 7% of the outstanding Class C shares); David J.
Lenderman TTEE, David J. Lenderman PS Plan DTD 01/01/89, FBO David J. Lenderman,
505 North Lake Shore Drive--Suite 5902, Chicago, Illinois owned 13,494 Class C
shares (approximately 6% of the outstanding Class C shares); Prudential
Securities C/F, Mark J. Schneider SEP DTD 01/01/93, 345 Cedar Avenue, Highland
Park, Illinois owned 14,000 Class C shares (approximately 6% of the outstanding
Class C shares); Prudential Securities C/F, Gregg R. Schneider SEP DTD 03/28/89,
3434 Vantage Lane, Glenview, Illinois owned 13,959 Class C shares (approximately
6% of the outstanding Class C shares); and Prudential Securities C/F, Neal
Schneider SEP DTD 03/28/89, 310 Old Farm Road, Northfield, Illinois owned 16,439
Class C shares (approximately 7% of the outstanding Class C shares).

As of October 13, 1995, Prudential Securities was the record holder for other
beneficial owners of 3,575,399 Class A shares (or 49% of the outstanding Class A
shares), 18,579,610 Class B shares (or 81% of the outstanding Class B shares)
and 229,878 Class C shares (or 94% of the outstanding Class C shares) of the
Fund. In the event of any meetings of shareholders, Prudential Securities will
forward, or cause the forwarding of, proxy materials to the beneficial owners
for which it is the record holder.

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

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

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

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

<PAGE>

SPECIMEN PRICE MAKE-UP

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

<TABLE><CAPTION>
CLASS A
<S> <C>
Net asset value and redemption price per Class A share............................... $15.04
Maximum sales charge (5% of offering price).......................................... $ 79
------
Offering price to public............................................................. $15.83
------
------
CLASS B
Net asset value, offering price and redemption price per Class B share*.............. $14.74
------
------
CLASS C
Net asset value, offering price and redemption price per Class C share*.............. $14.74
------
------
CLASS Z
Net asset value, offering price and redemption price per Class Z share**............. $15.04
------
------
</TABLE>

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

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

** Class Z shares did not exist prior to January 2, 1996.

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

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

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

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

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

The average annual total return for Class A shares for the one year and since
inception (July 24, 1992) periods ended April 30, 1995 was (14.1)% and 14.8%,
respectively. The average annual total return for Class B shares for the one
year and since inception (July 24, 1992) periods ended April 30, 1995 was
(15.3)% and 15.2%, respectively. The average annual total return for
Class C shares for the period since inception (August 1, 1994) ended
April 30, 1995 was (15.9)%. During these periods, no Class Z shares were
outstanding.

2
<PAGE>

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

The aggregate total return for Class A shares for the one year and since
inception (July 24, 1992) periods ended April 30, 1995 was (9.6)% and 54.1%,
respectively. The aggregate total return for Class B shares for the one year and
since inception (July 24, 1992) periods ended April 30, 1995 was (10.3)% and
50.8%, respectively. The aggregate total return for Class C shares for the
period since inception (August 1, 1994) ended April 30, 1995 was 11.0%. During
these periods, no Class Z shares were outstanding.

The following financial statements are unaudited and are based upon the
results of operations for the interim period ended April 30, 1995. Included
therein are all adjustments, if any, which are, in the opinion of management,
necessary to a fair statement of the results of the interim period presented.

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC. Portfolio of Investments
April 30, 1995 (Unaudited)
<TABLE>
<CAPTION>

Value
Shares Description (Note 1)
<C> <S> <C>
LONG-TERM INVESTMENTS--94.8%
Common Stocks--90.9%
Australia--15.8%
3,655,000 AAPC, Ltd. ............. $ 1,939,612
(Lodging)
2,581,499 Australian National 2,664,802
Industries Ltd.
(Multi-industry)
341,200 Brambles Industries Ltd. 3,363,360
......................
(Business & public
services)
904,700 Broken Hill Proprietary 13,179,744
Co., Ltd.*
(Energy sources)
4,238,473 BTR Nylex Ltd. ......... 8,288,317
(Industrial components)
1,695,679 Coca Cola Amatil, Ltd. 10,354,464
......................
(Food & household
products)
1,942,900 Nine Network Australia, 5,578,947
Ltd. .................
(Broadcasting &
publishing)
3,800,500 Sea World Property Trust, 2,900,913
Ltd. .
(Leisure & tourism)
1,498,500 West Australia Newspaper, 4,052,326
Ltd.
(Publishing)
3,717,400 Western Mining Corp.
Holdings, Ltd. ........ 21,024,398
(Non - ferrous metals) ------------
73,346,883
------------
Hong Kong--12.4%
3,186,000 Amoy Properties, Ltd. 2,654,314
......................
(Real estate)
1,477,000 Cheung Kong Holdings Ltd. 6,219,349
......................
(Real estate)
2,879,800 Consolidated Electric 6,304,910
Power ................
(Utilities - electric &
gas)
2,690,600 Guoco Group, Ltd. ...... 10,217,468
(Financial services)
569,604 HSBC Holdings, PLC ..... 6,603,198
(Financial services)
12,167,000 Hung Hing Printing Group, $ 2,160,892
Ltd.
(General manufacturing)
2,278,000 Hutchison Whampoa, Ltd. 9,886,438
......................
(Multi-industry)
812,400 Jardine Matheson Holdings 6,458,580
Ltd.* .
(General trading)
709,000 Liu Chong Hing 572,365
Investment, Ltd.
(Real estate)
18,350,000 Techtronic Industries, 1,303,604
Ltd. .................
(Machinery &
engineering)
1,597,000 The Wharf Holdings Ltd. 4,785,637
...................... ------------
(Multi-industry)
57,166,755
------------
India--0.3%
685,000 Indo Gulf Fertilizer 1,404,250
Industries* ------------
(Basic industries)
Indonesia--0.6%
1,863,600 Kabel Metal Industries, 2,921,003
Ltd. ................. ------------
(Wire & cable)
Japan--25.9%
412,000 Aiwa Co. ............... 11,498,812
(Consumer electronics)
71,600 Autobacs Seven Co. ..... 7,457,625
(Merchandising)
215,000 Daibiru Corp. .......... 2,655,582
(Real estate)
920 DDI Corp. .............. 8,085,511
(Telecommunications)
237,000 Fuji Bank .............. 5,685,748
(Financial services)
400 Japan Associates Finance 48,931
Co.
(Financial services)
211,000 Kato Denki Co. ......... 5,137,173
(Merchandising)
57,000 Keyence Corp. .......... 6,065,558
(Electronics)
</TABLE>

4 See Notes to Financial Statements.

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
Japan--(cont'd.)
135,000 Kyocera Corp. .......... $ 10,421,615
(Public works -
electronics)
188,000 Nichiei Co. ............ 12,101,663
(Financial services)
155,000 Nintendo Co., Ltd. ..... 9,922,209
(Recreation)
264,000 Nippon Comsys Corp. .... 3,668,409
(Construction)
500,000 Nippon Express Co. ..... 4,934,679
(Transportation)
290,880 Nissen Co., Ltd. ....... 9,189,321
(Merchandising)
375,000 Omron Corp. ............ 7,348,575
(Electronics)
325,000 Sanwa Bank Ltd. ........ 7,024,941
(Banking)
151,500 Sony Corp. ............. 7,682,957
(Entertainment)
36,000 Tokyo Electronic Co., 1,120,190
Ltd. ................. ------------
(Electronics)
120,049,499
------------
Korea--5.2%
30,621 Daewoo Securities Co., 887,682
Ltd. .................
(Financial services)
124,460 Lucky Co., Ltd. ........ 3,493,729
(Chemicals)
27,400 Mando Machinery Corp.* 1,757,539
......................
(Automotive)
9,500 Pohang Iron & Steel Co., 817,472
Ltd. .................
(Metals)
74,932 Samsung Electronics Co., 12,040,624
Ltd.* .
(Electronics)
14,829 Samsung Electronics Co.,
Ltd. (New)* .......... 2,295,300
(Electronics)
9,160 Shinsegae Co.* ......... $ 781,006
(Merchandising)
2,778 Shinsegae Co.* (New) ... 234,309
(Merchandising)
44,540 Shinwon Corp.* ......... 1,752,738
(Merchandising) ------------
24,060,399
------------
Malaysia--10.9%
2,027,000 IJM Corporation Berhad* 6,727,950
......................
(Construction)
1,000 Kedah Cement Holdings 1,255
Berhad
(Building materials)
2,300,000 Kuala Lumpur Kepong 6,609,998
Berhad
(Miscellaneous
materials)
441,000 Malayasian Airline System 1,365,574
......................
(Transportation)
61,000 Pacific Chemical Berhad 235,802
......................
(Chemicals)
1,500 Pilecon Engineering 1,785
Berhad ...............
(Machinery &
engineering)
8,840,000 Renong Berhad .......... 13,525,683
(Infrastructure)
2,625,000 Resorts World Holdings 13,812,993
......................
(Leisure & tourism)
2,887,000 Technology Resources
Industries Berhad* ... 7,362,113
(Data processing &
reproduction)
305,166 Time Engineering Berhad 734,968
...................... ------------
(Engineering)
50,378,121
------------
</TABLE>

5 See Notes to Financial Statements.

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
<TABLE>
<CAPTION>
Value
Shares Description (Note 1)
<C> <S> <C>
New Zealand--2.9%
3,601,100 Fletcher Challenge, Ltd. $ 9,684,802
......................
(Forest products &
paper)
2,560,000 Fletcher Forestry, Ltd. 3,580,131
...................... ------------
(Forest products &
paper)
13,264,933
------------
Singapore--14.7%
1,264,000 City Developments Ltd. 7,434,228
......................
(Real estate)
1,290,750 First Capital Corp. .... 3,425,459
(Construction)
659,000 Fraser & Neave, Ltd. ... 7,231,889
(Beverages & tobacco)
1,818,000 Hong Leong Finance, Ltd. 5,763,563
......................
(Financial services)
1,454,000 Overseas Union Bank .... 8,395,280
(Financial services)
1,528,750 Sembawang Maritime, Ltd. 6,414,566
......................
(Transportation)
474,000 Singapore Airlines Ltd. 4,555,731
......................
(Transportation)
1,144,000 United Overseas Bank, 11,897,863
Ltd. .................
(Financial services)
7,607,000 Wing Tai Holdings ...... 12,876,574
(Conglomerates) ------------
67,995,153
------------
Thailand--2.2%
181,601 Land & House Public Co., 3,204,506
Ltd.
(Construction &
housing)
2,722,800 Sahavirya Steel Industry* 7,029,795
...................... ------------
(Metals)
10,234,301
------------
Total common stocks
(cost $386,199,996).... 420,821,297
------------
Preferred Stocks--0.4%
Australia--0.1%
63,635 Bank of Melbourne, Ltd. $ 599,523
...................... ------------
(Financial services)
Korea--0.3%
8,200 Daewoo Securities Co., 161,343
Ltd. .................
(Financial services)
30,450 Mando Machinery Corp.* 1,038,499
...................... ------------
(Automotive)
1,199,842
------------
Total preferred stocks
(cost $1,820,848)...... 1,799,365
------------
Depository Receipts--1.9%
Indonesia--1.0%
121,900 PT Indonesia Satellite* 4,403,638
......................
(Telecommunications)
Korea--0.9%
145,400 Pohang Iron & Steel Co., 4,016,675
Ltd.* ------------
(Metals)
Total depository receipts
(cost $9,262,018)...... 8,420,313
------------
Convertible Loan Stocks--0.2%
Singapore
631,000 Sembawang Maritime, Ltd.
......................
(Transportation)
(cost $402,346).......... 878,023
------------

<CAPTION>
Units Warrants*--1.0%
- -----------
<C> <S> <C>
Australia
West Australian
Newspaper, Ltd.
214,071 expiring June '99 @ 60,691
A$5.00 ------------
(Publishing)
Japan--0.3%
Autobacs Seven Co.
150 expiring Mar. '96 @ 241,875
(YEN)8,231
(Merchandising)
Nissen Co., Ltd.
493 expiring Nov. '96 @ 588,763
(YEN)1,681 ...........
(Merchandising)
</TABLE>

6 See Notes to Financial Statements.

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
<TABLE>
<CAPTION>
Value
Units Description (Note 1)
<C> <S> <C>
Japan--(cont'd.)
Nitori Co.
10,250 expiring Feb. '98 @ (YEN)
3,268.................. $ 605,035
------------
(Merchandising)
1,435,673
------------
Singapore--0.7%
Hong Leong Finance, Ltd.
190,200 expiring Nov. '98 @ 177,349
SGD3.25
(Financial services)
Singapore Finance
144,300 expiring June '99 @
SGD1.50 . 70,380
(Financial services)
United Overseas Bank,
Ltd.
600,000 expiring June '97 @
SGD3.34 . 3,141,587
(Financial services) ------------
3,389,316
------------
Total warrants
(cost $5,905,953)...... 4,885,680
------------

<CAPTION>
Principal
Amount
(000) Convertible Bond--0.4%
- -----------
<C> <S> <C>
India
Gujarat Ambuja Cement
US$ 1,350 3.50%, 6/30/99
(Building materials)
(cost $2,020,598)........ 1,741,500
------------
Total long-term
investments
(cost $405,611,759).... 438,546,178
------------
SHORT-TERM INVESTMENT--0.6%
Repurchase Agreement
Joint Repurchase Agreement Account,
2,957 5.93%, 5/1/95 (Note 5)
(cost $2,957,000)...... 2,957,000
------------
Total Investments--95.4%
(cost $408,568,759; Note
4)..................... 441,503,178
Other assets in excess of
liabilities--4.6%...... 21,318,859
------------
Net Assets--100%......... $462,822,037
------------
------------
</TABLE>

- ------------
* Non-income producing security.
7 See Notes to Financial Statements.

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Assets and Liabilities
(Unaudited)
<TABLE>
<CAPTION>
April 30,
Assets 1995
--------------
<S> <C>
Investments, at value (cost $408,568,759)................................................ $ 441,503,178
Foreign currency (cost $13,947,341)...................................................... 13,936,724
Receivable for investments sold.......................................................... 8,325,246
Receivable for Fund shares sold.......................................................... 3,286,710
Dividends and interest receivable........................................................ 1,645,038
Deferred expenses and other assets....................................................... 100,919
--------------
Total assets......................................................................... 468,797,815
--------------
Liabilities
Payable for investments purchased........................................................ 2,561,312
Payable for Fund shares reacquired....................................................... 1,998,072
Accrued expenses and other liabilities................................................... 726,215
Distribution fee payable................................................................. 313,978
Management fee payable................................................................... 284,316
Deferred Thailand capital gains tax liability............................................ 91,885
--------------
Total liabilities.................................................................... 5,975,778
--------------
Net Assets............................................................................... $ 462,822,037
--------------
--------------
Net assets were comprised of:
Common stock, at par................................................................... $ 31,258
Paid-in capital in excess of par....................................................... 451,671,399
--------------
451,702,657
Accumulated net investment loss........................................................ (896,214)
Accumulated net realized loss on investments and foreign currency transactions......... (20,823,737)
Net unrealized appreciation on investments and foreign currencies...................... 32,839,331
--------------
Net assets, April 30 ,1995............................................................. $ 462,822,037
--------------
--------------
Class A:
Net asset value and redemption price per share
($106,686,516 / 7,094,793 shares of common stock issued and outstanding)............. $15.04
Maximum sales charge (5% of offering price)............................................ .79
--------------
Maximum offering price to public....................................................... $15.83
--------------
--------------
Class B:
Net asset value, offering price and redemption price per share
($355,034,960 / 24,088,698 shares of common stock issued and outstanding)............ $14.74
--------------
--------------
Class C:
Net asset value, offering price and redemption price per share
($1,100,561 / 74,694 shares of common stock issued and outstanding).................. $14.74
--------------
--------------
</TABLE>

See Notes to Financial Statements.
8

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended
April 30,
Net Investment Income 1995
----------------
<S> <C>
Income
Dividends (net of foreign
withholding taxes of
$406,444)....................... $ 3,652,694
Interest.......................... 301,345
----------------
Total income.................... 3,954,039
----------------
Expenses
Management fee.................... 1,765,501
Distribution fee--Class A......... 116,707
Distribution fee--Class B......... 1,881,977
Distribution fee--Class C......... 5,198
Transfer agent's fees and
expenses.......................... 470,000
Custodian's fees and expenses..... 444,000
Reports to shareholders........... 135,000
Registration fees................. 67,000
Directors' fees................... 21,000
Amortization of organization
expense........................... 20,000
Audit fee......................... 19,000
Legal fees........................ 15,000
Miscellaneous..................... 15,628
----------------
Total expenses.................. 4,976,011
----------------
Net investment loss................. (1,021,972)
----------------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized loss on:
Investment transactions (net of
Thailand capital gains tax of
$539,305)....................... (20,938,443)
Foreign currency transactions..... (1,090,810)
----------------
(22,029,253)
----------------
Net change in unrealized
appreciation/depreciation on:
Investments (net of deferred
Thailand capital gains tax of
$91,885)........................ (34,898,786)
Foreign currencies................ 1,114,752
----------------
(33,784,034)
----------------
Net loss on investments and
foreign currencies.............. (55,813,287)
----------------
Net Decrease in Net Assets
Resulting from Operations........... $ (56,835,259)
----------------
----------------
</TABLE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Changes in Net Assets
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended Year Ended
Increase (Decrease) April 30, October 31,
in Net Assets 1995 1994
---------------- ----------------
<S> <C> <C>
Operations
Net investment loss... $ (1,021,972) $ (5,622,111)
Net realized gain
(loss) on investment
and foreign currency
transactions........ (22,029,253) 2,992,416
Net change in
unrealized
appreciation/depreciation
on investments and
foreign
currencies.......... (33,784,034) 24,029,033
---------------- ----------------
Net increase
(decrease) in net
assets resulting
from operations..... (56,835,259) 21,399,338
---------------- ----------------
Net equalization
credits............. 125,758 --
---------------- ----------------
Distributions in excess
of net investment
income (Note 1)
Class A............... -- (293,320)
Class B............... -- (658,425)
---------------- ----------------
-- (951,745)
---------------- ----------------
Distributions to
shareholders
from net realized
gains
Class A............... (575,474) (944,124)
Class B............... (2,780,214) (3,989,283)
Class C............... (5,693) --
---------------- ----------------
(3,361,381) (4,933,407)
---------------- ----------------
Fund share transactions
(net of
share conversions)
(Note 6)
Proceeds from shares
sold................ 416,535,662 520,354,132
Net asset value of
shares
issued to
shareholders
in reinvestment of
distributions....... 3,169,310 5,612,542
Cost of shares
reacquired............ (456,399,897) (297,243,493)
---------------- ----------------
Net increase
(decrease) in net
assets from Fund
share
transactions........ (36,694,925) 228,723,181
---------------- ----------------
Total increase
(decrease)............ (96,765,807) 244,237,367
Net Assets
Beginning of period..... 559,587,844 315,350,477
---------------- ----------------
End of period........... $ 462,822,037 $ 559,587,844
---------------- ----------------
---------------- ----------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.
9

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Notes to Financial Statements
(Unaudited)

Prudential Pacific Growth Fund, Inc. (the ``Fund'') is registered under the
Investment Company Act of 1940 as a diversified, open-end management investment
company. The Fund was incorporated in Maryland on August 14, 1991 and had no
operations other than the issuance of 5,000 shares each of Class A and Class B
common stock for $100,000 on May 6, 1992 to Prudential Mutual Fund Management,
Inc. (``PMF''). The Fund commenced investment operations on July 24, 1992. The
investment objective of the Fund is to seek long-term capital growth by
investing primarily in common stocks, common stock equivalents and other
securities of companies doing business in or domiciled in the Pacific Basin
region.

Note 1. Accounting The following is a summary
Policies of significant accounting pol-
icies followed by the Fund in the preparation of
its financial statements.

Securities Valuation: Securities traded on an exchange (whether domestic or
foreign) are valued at the last reported sales price on the primary exchange on
which they are traded. Securities traded in the over-the-counter market
(including securities listed on exchanges for which a last sales price is not
available) are valued at the average of the last reported bid and asked prices.
Any securities or other assets for which current market quotations are not
readily available are valued at fair value as determined in good faith under
procedures established by and under the general supervision and responsibility
of the Fund's Board of Directors.

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

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

(ii) purchases and sales of investment securities, income and expenses--at
the rate 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 fiscal period, 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 fiscal period. 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 long-term debt
securities sold during the fiscal period. Accordingly, realized foreign
currrency gains (losses) are included in the reported net realized losses on
investment transactions.

Net realized losses on foreign currency transactions of $1,090,810 represent
net foreign exchange losses from forward currency contracts, disposition of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on security transactions, and the difference between the
amounts of interest, dividends and foreign 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 fiscal period end exchange rates are reflected as a component of
unrealized 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.

Securities Transactions and Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign currency transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis.
10

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

Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital and currency gains, if any,
annually. 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 due to timing differences concerning recognition of
income.

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

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

Deferred Organization Expenses: Approximately $200,000 of organization and
initial registration costs have been deferred and are being amortized over the
period of benefit not to exceed 60 months from the date the Fund commenced
investment operations.

Note 2. Agreements The Fund has a manage-
ment agreement with PMF. Pursuant to this
agreement, PMF has responsibility for all investment advisory services and
supervises the subadviser's performance of such services. PMF has entered into a
subadvisory agreement with The Prudential Investment Corporation (``PIC''); PIC
furnishes investment advisory services in connection with the management of the
Fund. PMF pays for the cost of the subadviser's services, the compensation of
officers of the Fund, occupancy and certain clerical and bookkeeping costs of
the Fund. The Fund bears all other costs and expenses.

The management fee paid PMF is computed daily and payable monthly at an
annual rate of .75 of 1% of the average daily net assets of the Fund.

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

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

PMFD has advised the Fund that it has received approximately $191,000 in
front-end sales charges resulting from sales of Class A shares during the six
months ended April 30, 1995. From these fees, PMFD paid such sales charges to
PSI and Pruco Securities Corporation, affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.

PSI has advised the Fund that for the six months ended April 30, 1995, it
received approximately $924,300 in contingent deferred sales charges imposed
upon certain redemptions by Class B and Class C shareholders.

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

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
With Affiliates wholly owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the six months April 30, 1995, the Fund incurred fees of approximately $392,000
for the services of PMFS. As of April 30, 1995, approximately $65,000 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 non-affiliates.

Note 4. Portfolio Purchases and sales of
Securities investment securities, other
than short-term investments, for the six months
ended April 30, 1995 were $144,179,127 and $193,739,115, respectively.

The United States federal income tax basis of the Fund's investments at April
30, 1995 was $408,727,163 and accordingly, net unrealized appreciation for
federal income
11

<PAGE>
tax purposes was $32,776,015 (gross unrealized appreciation--$50,400,474; gross
unrealized depreciation--$17,624,459).

Bear Stearns & Co. 5.92%, in the principal amount of $125,000,000, repurchase
price $125,061,667, due 5/1/95. The value of the collateral including accrued
interest is $127,647,875.

UBS Securities, Inc., 5.93%, in the principal amount of $100,000,000,
repurchase price $100,049,417, due 5/1/95. The value of the collateral including
accrued interest is $102,001,215.

Morgan Stanley and Co., Inc., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,982,534.

CS First Boston Corp., 5.93%, in the principal amount of $225,000,000,
repurchase price $225,111,188, due 5/1/95. The value of the collateral including
accrued interest is $229,725,279.

Note 6. Capital The Fund currently offers
Class A, Class B and Class C shares. Class A
shares are sold with a front-end sales charge of up to 5%. Class B shares are
sold with a contingent deferred sales charge which declines from 5% to zero
depending on the period of time the shares are held. Class C shares are sold
with a contingent deferred sales charge of 1% during the first year. Commencing
in February 1995, Class B shares automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. A special exchange
privilege is also available for shareholders who qualified to purchase Class A
shares at net asset value.

The Fund has authorized 2 billion shares of common stock at $.001 par value
per share equally divided into three classes, designated Class A, Class B and
Class C common stock. Of the 31,258,185 shares of common stock is-
sued and outstanding at April 30, 1995, PMF owned 5,000
Class A shares and 5,000 Class B shares and Prudential owned 211,960 Class A
shares.

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

<TABLE>
<CAPTION>
Class A Shares Amount
- ----------------------------- ----------- -------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold.................. 15,037,485 $ 217,368,052
Shares issued in reinvestment
of distributions........... 36,103 541,915
Shares reacquired............ (15,165,293) (221,501,053)
----------- -------------
Net decrease in shares
outstanding before
conversion................. (91,705) (3,591,086)
Shares issued upon conversion
from Class B............... 1,331,960 18,621,690
----------- -------------
Net increase in shares
outstanding................ 1,240,255 $ 15,030,604
----------- -------------
----------- -------------
Year ended October 31, 1994:
Shares sold.................. 8,481,016 $ 142,276,687
Shares issued in reinvestment
of distributions........... 68,502 1,139,181
Shares reacquired............ (6,691,379) (112,537,168)
----------- -------------
Net increase in shares
outstanding................ 1,858,139 $ 30,878,700
----------- -------------
----------- -------------
</TABLE>

<PAGE>
<TABLE>
<CAPTION>
Class B Shares Amount
- ----------------------------- ----------- -------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold.................. 12,829,376 $ 184,440,649
Shares issued in reinvestment
of distributions........... 177,755 2,621,885
Shares reacquired............ (15,233,323) (220,492,815)
----------- -------------
Net decrease in shares
outstanding before
conversion................. (2,226,192) (33,430,281)
Shares reacquired upon
conversion into Class A.... (1,357,212) (18,621,690)
----------- -------------
Net decrease in shares
outstanding................ (3,583,404) $ (52,051,971)
----------- -------------
----------- -------------
Year ended October 31, 1994:
Shares sold.................. 22,664,100 $ 375,017,028
Shares issued in reinvestment
of distributions........... 271,772 4,473,361
Shares reacquired............ (11,011,611) (182,353,187)
----------- -------------
Net increase in shares
outstanding................ 11,924,261 $ 197,137,202
----------- -------------
----------- -------------
<CAPTION>
Class C Shares Amount
- ----------------------------- ----------- -------------
<S> <C> <C>
Six months ended
April 30, 1995:
Shares sold.................. 1,039,554 $ 14,726,961
Shares issued in reinvestment
of distributions........... 373 5,510
Shares reacquired............ (1,008,418) (14,406,029)
----------- -------------
Net increase in shares
outstanding................ 31,509 $ 326,442
----------- -------------
----------- -------------
August 1, 1994 through
October 31, 1994*
Shares sold.................. 183,643 $ 3,060,417
Shares reacquired............ (140,458) (2,353,138)
----------- -------------
Net increase in shares
outstanding................ 43,185 $ 707,279
----------- -------------
----------- -------------
</TABLE>

- ------------
* Commencement of offering of Class C shares.
13

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Financial Highlights
(Unaudited)
<TABLE>
<CAPTION>
Class A Class B
------------------------------------------------- --------------------------------------
July 24,
Six Months Year Ended October 1992* Six Months
Ended 31, Through Ended Year Ended October 31,
April 30, --------------------- October 31, April 30, ------------------------
1995(D) 1994(D) 1993(D) 1992 1995(D) 1994(D) 1993(D)
---------- ------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.......................... $ 16.90 $ 16.10 $ 10.65 $ 10.00 $ 16.62 $ 15.94 $ 10.63
---------- ------- ---------- ----------- ---------- ---------- ----------
Income from investment operations
Net investment income (loss)...... .02 (.08) (.01) (.02) (.04) (.21) (.10)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions........... (1.78) 1.15 5.48 .67 (1.74) 1.13 5.43
---------- ------- ---------- ----------- ---------- ---------- ----------
Total from investment
operations.................... (1.76) 1.07 5.47 .65 (1.78) .92 5.33
---------- ------- ---------- ----------- ---------- ---------- ----------
Less distributions
Distributions in excess of net
investment income............... -- (.06) (.02) -- -- (.03) (.02)
Distributions from net realized
gains........................... (.10) (.21) -- -- (.10) (.21) --
---------- ------- ---------- ----------- ---------- ---------- ----------
Total distributions............. (.10) (.27) (.02) -- (.10) (.24) (.02)
---------- ------- ---------- ----------- ---------- ---------- ----------
Net asset value, end of period.... $ 15.04 $ 16.90 $ 16.10 $ 10.65 $ 14.74 $ 16.62 $ 15.94
---------- ------- ---------- ----------- ---------- ---------- ----------
---------- ------- ---------- ----------- ---------- ---------- ----------
TOTAL RETURN#..................... (10.40)% 6.67% 51.39% 6.50% (10.70)% 5.79% 50.17%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)... $106,687 $98,921 $ 64,353 $13,918 $355,035 $459,949 $250,997
Average net assets (000).......... $ 94,189 $92,233 $ 26,264 $12,884 $379,515 $404,506 $ 74,590
Ratios to average net assets:
Expenses, including distribution
fees.......................... 1.51%** 1.57% 1.63% 2.72%** 2.26%** 2.33% 2.37%
Expenses, excluding distribution
fees.......................... 1.26%** 1.33% 1.43% 2.52%** 1.26%** 1.33% 1.37%
Net investment income (loss).... .14%** (.50)% (.04)% (.75)%** (.61)%** (1.27)% (.83)%
Portfolio turnover................ 31% 56% 44% 0% 31% 56% 44%
<CAPTION>
Class C
-------------------------
July 24, August 1,
1992* Six Months 1994@
Through Ended Through
October 31, April 30, October 31,
1992 1995(D) 1994(D)
----------- ---------- -----------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of
period.......................... $ 10.00 $16.62 $ 16.68
----------- ----- -----

Income from investment operations
Net investment income (loss)...... (.04) (.04) (.06)
Net realized and unrealized gain
(loss) on investment and foreign
currency transactions........... .67 (1.74) --
----------- ----- -----

Total from investment
operations.................... .63 (1.78) (.06)
----------- ----- -----

Less distributions
Distributions in excess of net
investment income............... -- -- --
Distributions from net realized
gains........................... -- (.10) --
----------- ----- -----

Total distributions............. -- (.10) --
----------- ----- -----

Net asset value, end of period.... $ 10.63 $14.74 $ 16.62
----------- ----- -----
----------- ----- -----

TOTAL RETURN#..................... 6.30% (10.70)% (.36)%
RATIOS/SUPPLEMENTAL DATA:
Net assets, end of period (000)... $20,050 $1,101 $ 718
Average net assets (000).......... $16,025 $1,048 $ 458
Ratios to average net assets:
Expenses, including distribution
fees.......................... 3.52%** 2.26%** 3.00%**
Expenses, excluding distribution
fees.......................... 2.52%** 1.26%** 2.00%**
Net investment income (loss).... (1.55)%** (.44)%** (1.64)%**
Portfolio turnover................ 0% 31% 56%
</TABLE>

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

See Notes to Financial Statements.

<PAGE>
Prudential Pacific Growth Fund, Inc.
- --------------------------------------------------------------------------------
PROSPECTUS DATED JANUARY 3, 1995
- --------------------------------------------------------------------------------
Prudential Pacific Growth Fund, Inc. (the Fund) is an open-end, diversified
management investment company whose investment objective is long-term growth of
capital. The Fund seeks to achieve this objective by investing primarily in
common stocks, common stock equivalents (such as convertible debt securities and
warrants) and other securities of companies doing business in or domiciled in
the Pacific Basin region. See "How the Fund Invests--Investment Objective and
Policies." Under normal circumstances, the Fund intends to invest at least 65%
of its total assets in such securities. The Fund may invest in equity securities
of other companies and in non-convertible debt securities and options on stocks,
stock indices, foreign currencies and futures contracts on foreign currencies
and may purchase and sell futures contracts on foreign currencies and groups of
currencies and on financial or stock indices so as to hedge its portfolio and to
attempt to enhance income. See "How the Fund Invests--Investment Objective and
Policies." There is no assurance that the Fund's investment objective will be
achieved. The Fund's address is One Seaport Plaza, New York, New York 10292, and
its telephone number is (800) 225-1852.

Investors are advised to read this Prospectus and retain it for future
reference.
- --------------------------------------------------------------------------------

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

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

WHAT IS THE FUND'S INVESTMENT OBJECTIVE?
The Fund's investment objective is long term growth of capital. It seeks to
achieve this objective by investing primarily in common stocks, common stock
equivalents and other securities of companies doing business in or domiciled
in the Pacific Basin region. There can be no assurance that the Fund's
objective will be achieved. See "How the Fund Invests-- Investment Objective
and Policies" at page 6.

RISK FACTORS AND SPECIAL CHARACTERISTICS
Under normal circumstances, the Fund anticipates that at least 65% of its
total assets will consist of Pacific Basin region corporate securities,
primarily common stock and other securities convertible into common stock. See
"How the Fund Invests--Investment Objective and Policies" at page 6. Investing
in securities of foreign companies and countries involves certain risks and
considerations not typically associated with investments in U.S. Government
Securities and those of domestic companies. See "How the Fund Invests--Risks
and Special Considerations of Investing in Foreign Securities" at page 7. The
Fund may also engage in various hedging and income enhancement strategies,
including investing in derivatives. See "How the Fund Invests--Hedging and
Income Enhancement Strategies--Risks of Hedging and Income Enhancement
Strategies" at page 10.

WHO MANAGES THE FUND?
Prudential Mutual Fund Management, Inc. (PMF or the Manager), is the Manager
of the Fund and is compensated for its services at an annual rate of .75 of 1%
of the Fund's average daily net assets. As of November 30, 1994, PMF served as
manager or administrator to 66 investment companies, including 37 mutual
funds, with aggregate assets of approximately $47 billion. The Prudential
Investment Corporation (PIC or the Subadviser) furnishes investment advisory
services in connection with the management of the Fund under a Subadvisory
Agreement with PMF. See "How the Fund is Managed--Manager" at page 13. The
management fee is higher than that paid by most other investment companies.

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

Prudential Securities Incorporated (Prudential Securities or PSI), a major
securities underwriter and securities and commodities broker, acts as the
Distributor of the Fund's Class B and Class C shares and is paid an annual
distribution and service fee at the rate of 1% of the average daily net assets
of each of the Class B and Class C shares. See "How the Fund is
Managed--Distributor" at page 13.

2
<PAGE>

WHAT IS THE MINIMUM INVESTMENT?

The minimum initial investment for Class A and Class B shares is $1,000 per
class and $5,000 for Class C shares. The minimum subsequent investment is $100
for all classes. There is no minimum investment requirement for certain
retirement and employee savings plans or custodial accounts for the benefit of
minors. For purchases made through the Automatic Savings Accumulation Plan,
the minimum initial and subsequent investment is $50. See "Shareholder Guide--
How to Buy Shares of the Fund" at page 20 and "Shareholder Guide--Shareholder
Services" at page 28.

HOW DO I PURCHASE SHARES?

You may purchase shares of the Fund through Prudential Securities, Pruco
Securities Corporation (Prusec) or directly from the Fund, through its
transfer agent, Prudential Mutual Fund Services, Inc. (PMFS or the Transfer
Agent), at the net asset value per share (NAV) next determined after receipt
of your purchase order by the Transfer Agent or Prudential Securities plus a
sales charge which may be imposed either (i) at the time of purchase (Class A
shares) or (ii) or on a deferred basis (Class B or Class C shares). See "How
the Fund Values Its Shares" at page 16 and "Shareholder Guide-- How to Buy
Shares of the Fund" at page 20.

WHAT ARE MY PURCHASE ALTERNATIVES?

The Fund offers three classes of shares:

. Class A Shares: Sold with an initial sales charge of up to 5% of the offering
price
. Class B Shares: Sold without an initial sales charge but are subject to a
contingent deferred sales charge or CDSC (declining from 5%
to zero of the lower of the amount invested or the redemption
proceeds) which will be imposed on certain redemptions made
within six years of purchase. Although Class B shares are
subject to higher ongoing distribution-related expenses than
Class A shares, Class B shares will automatically convert to
Class A shares (which are subject to lower ongoing
distribution-related expenses) approximately seven years
after purchase.
. Class C Shares: Sold without an initial sales charge and for one year after
purchase, are subject to a 1% CDSC on redemptions. Like
Class B shares, Class C shares are subject to higher ongoing
distribution-related expenses than Class A shares but do not
convert to another class.

See "Shareholder Guide--Alternative Purchase Plan" at page 21.

HOW DO I SELL MY SHARES?

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

HOW ARE DIVIDENDS AND DISTRIBUTIONS PAID?

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

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

<TABLE>
<CAPTION>
ANNUAL FUND OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE NET
ASSETS) CLASS A SHARES CLASS B SHARES CLASS C SHARES
-------------- ------------------------ ------------------------
<S> <C> <C> <C>
Management Fees............... .75% .75% .75%
12b-1 Fees.................... .25%++ 1.00% 1.00%
Other Expenses................ .58% .58% .58%
-- -- --
Total Fund Operating
Expenses.................... 1.58% 2.33% 2.33%
-- -- --
-- -- --
</TABLE>
<TABLE>
<CAPTION>
EXAMPLE 1 3 5 10
- --------------------------------------------------------------
<S> <C> <C> <C> <C>
YEAR YEARS YEARS YEARS
---- ----- ----- -----
You would pay the following expenses on a $1,000 investment,
assuming (1) 5% annual return and (2) redemption at the end
of each time period:
Class A.................................................... $ 65 $ 97 $ 132 $ 228
Class B.................................................... $ 74 $ 103 $ 135 $ 239
Class C**.................................................. $ 34 $ 73 $ 125 $ 267
You would pay the following expenses on the same investment,
assuming no redemption:
Class A.................................................... $ 65 $ 97 $ 132 $ 228
Class B.................................................... $ 24 $ 73 $ 125 $ 239
Class C**.................................................. $ 24 $ 73 $ 125 $ 267
</TABLE>

The above example with respect to Class A and Class B shares is based on
restated data for the Fund's fiscal year ended October 31, 1994. The above
example with respect to Class C shares is based on expenses expected to have
been incurred if Class C shares had been in existence during the entire
fiscal year ended October 31, 1994. The example should not be considered a
representation of past or future expenses. Actual expenses may be greater or
less than those shown.

The purpose of this table is to assist an investor in understanding the
various types of costs and expenses that an investor in the Fund will bear,
whether directly or indirectly. For more complete descriptions of the
various costs and expenses, see "How the Fund is Managed." "Other Expenses"
include operating expenses of the Fund, such as Directors' and professional
fees, registration fees, reports to shareholders, transfer agency and
custodian (domestic and foreign) fees (but excludes foreign withholding
taxes).
------------------
* Class B shares will automatically convert to Class A shares approximately
seven years after purchase. See "Shareholder Guide-- Conversion
Feature--Class B Shares."
** Estimated based on expenses expected to have been incurred if Class C
shares had been in existence during the entire fiscal year ended October
31, 1994.
+ Pursuant to rules of the National Association of Securities Dealers,
Inc., the aggregate initial sales charges, deferred sales charges and
asset-based sales charges on shares of the Fund may not exceed 6.25% of
total gross sales, subject to certain exclusions. This 6.25% limitation
is imposed on the Fund rather than on a per shareholder basis. Therefore,
long-term shareholders of the Fund may pay more in total sales charges
than the economic equivalent of 6.25% of such shareholders' investment in
such shares. See "How the Fund is Managed--Distributor."
++ Although the Class A Distribution and Service Plan provides that the Fund
may pay up to an annual rate of .30 of 1% of average daily net assets of
the Class A shares, the Distributor has agreed to limit its distribution
fee with respect to Class A shares of the Fund to .25 of 1% of the
average daily net asset value of the Class A shares for the fiscal year
ending October 31, 1995. Total operating expenses without such limitation
would be 1.63%. See "How the Fund is Managed--Distributor."

4
<PAGE>
FINANCIAL HIGHLIGHTS
(FOR A SHARE OUTSTANDING THROUGHOUT THE INDICATED PERIOD)

The following financial highlights have been audited by Deloitte & Touche
LLP, independent accountants, whose report thereon was unqualified. This
information should be read in conjunction with the financial statements and
notes thereto, which appear in the Statement of Additional Information. The
following financial highlights contain selected data for a Class A, Class B and
Class C share of common stock outstanding, respectively, total return, ratios
to average net assets and other supplemental data for the periods indicated.
The information is based on data contained in the financial statements.
<TABLE>
<CAPTION>
CLASS A CLASS B
------------------------------------------------------ ------------------------------------------------------
YEAR YEAR JULY 24, 1992* YEAR YEAR JULY 24, 1992*
ENDED ENDED THROUGH ENDED ENDED THROUGH
OCTOBER 31, 1994+ OCTOBER 31, 1993+ OCTOBER 31, 1992 OCTOBER 31, 1994+ OCTOBER 31, 1993+ OCTOBER 31, 1992
----------------- ----------------- ---------------- ----------------- ----------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset
value,
beginning of
period...... $ 16.10 $ 10.65 $ 10.00 $ 15.94 $ 10.63 $ 10.00
----- ----- ----- ------ ------ -----
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
loss........ (.08) (.01) (.02) (.21) (.10) (.04)
Net realized
and
unrealized
gain on
investment
and foreign
currency
transactions.. 1.15 5.48 .67 1.13 5.43 .67
----- ----- ----- ------ ------ -----
Total from
investment
operations.. 1.07 5.47 .65 .92 5.33 .63
----- ----- ----- ------ ------ -----
LESS
DISTRIBUTIONS:
Distributions
in excess of
net
investment
income...... (.06) (.02) -- (.03) (.02) --
Distributions
from net
realized
gains....... (.21) -- -- (.21) -- --
----- ----- ----- ------ ------ -----
Total
distributions.... (.27) (.02) -- (.24) (.02) --
----- ----- ----- ------ ------ -----
Net asset
value, end of
period..... $ 16.90 $ 16.10 $ 10.65 $ 16.62 $ 15.94 $ 10.63
----- ----- ----- ------ ------ -----
----- ----- ----- ------ ------ -----
TOTAL
RETURN***..... 6.67% 51.39% 6.50% 5.79% 50.17% 6.30%
RATIOS/SUPPLEMENTAL
DATA:
Net assets,
end of period
(000)........ $98,921 $64,353 $ 13,918 $ 459,949 $ 250,997 $ 20,050
Average net
assets
(000)......... $92,233 $26,264 $ 12,884 $ 404,506 $ 74,590 $ 16,025
Ratios to
average net
assets:+++
Expenses,
including
distribution
fees........ 1.57% 1.63% 2.72%** 2.33% 2.37% 3.52%**
Expenses,
excluding
distribution
fees........ 1.33% 1.43% 2.52%** 1.33% 1.37% 2.52%**
Net
investment
loss........ (.50)% (.04)% (.75)%** (1.27)% (.83)% (1.55)%**
Portfolio
turnover
rate........ 56% 44% 0% 56% 44% 0%

<CAPTION>
CLASS C
-----------------
AUGUST 1, 1994++
THROUGH
OCTOBER 31, 1994+
-----------------
<S> <C>
PER SHARE
OPERATING
PERFORMANCE:
Net asset
value,
beginning of
period...... $ 16.68
-----
INCOME FROM
INVESTMENT
OPERATIONS:
Net investment
loss........ (.06)
Net realized
and
unrealized
gain on
investment
and foreign
currency
transactions. --
-----
Total from
investment
operations.. (.06)
-----
LESS
DISTRIBUTIONS:
Distributions
in excess of
net
investment
income...... --
Distributions
from net
realized
gains........ --
-----
Total
distributions. --
-----
Net asset
value, end of
period........ $ 16.62
-----
-----
TOTAL
RETURN***..... (.36)%
RATIOS/SUPPLEM
DATA:
Net assets,
end of period
(000)......... $ 718
Average net
assets
(000)......... $ 458
Ratios to
average net
assets:+++
Expenses,
including
distribution
fees........ 3.00%**
Expenses,
excluding
distribution
fees........ 2.00%**
Net
investment
loss........ (1.64)%**
Portfolio
turnover
rate........ 56%
</TABLE>

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

* Commencement of investment operations.
** Annualized.

*** Total return considers the effects of sale 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.

+ Calculated based upon average shares outstanding during the year.

++ Commencement of offering of Class C shares.

+++ Because of the event referred to in ++ and the timing of such, the
ratios for Class C shares are not necessarily comparable to that of
Class A or Class B shares and are not necessarily indicative of future
ratios.

5
<PAGE>
HOW THE FUND INVESTS

INVESTMENT OBJECTIVE AND POLICIES

THE FUND'S INVESTMENT OBJECTIVE IS LONG-TERM GROWTH OF CAPITAL. THE FUND SEEKS
TO ACHIEVE THIS OBJECTIVE BY INVESTING PRIMARILY IN EQUITY SECURITIES OF
CORPORATIONS DOMICILED IN THE PACIFIC BASIN REGION, INCLUDING, BUT NOT LIMITED
TO, JAPAN, AUSTRALIA, HONG KONG, SINGAPORE, SOUTH KOREA, MALAYSIA, THAILAND,
INDONESIA, THE PHILIPPINES AND NEW ZEALAND. CURRENT INCOME FROM DIVIDENDS AND
INTEREST WILL NOT BE AN IMPORTANT CONSIDERATION IN SELECTING PORTFOLIO
SECURITIES. THE FUND ANTICIPATES THAT UNDER NORMAL CONDITIONS AT LEAST 65% OF
ITS TOTAL ASSETS WILL CONSIST OF PACIFIC BASIN REGION CORPORATE SECURITIES,
PRIMARILY COMMON STOCKS AND OTHER SECURITIES CONVERTIBLE INTO COMMON STOCK.
THERE IS NO LIMIT ON THE PERCENTAGE OF FUND ASSETS THAT MAY BE INVESTED IN ANY
SINGLE COUNTRY. THE FUND RESERVES THE RIGHT AS A DEFENSIVE MEASURE TO HOLD OTHER
TYPES OF SECURITIES WITHOUT LIMIT, INCLUDING COMMERCIAL PAPER OF CORPORATIONS,
BANKERS' ACCEPTANCES, NON-CONVERTIBLE DEBT SECURITIES OR GOVERNMENT AND HIGH
QUALITY MONEY MARKET SECURITIES OF UNITED STATES AND NON-UNITED STATES ISSUERS,
OR CASH (FOREIGN CURRENCIES OR UNITED STATES DOLLARS), IN SUCH PROPORTIONS AS,
IN THE OPINION OF THE FUND'S INVESTMENT ADVISER, PREVAILING MARKET, ECONOMIC OR
POLITICAL CONDITIONS WARRANT. A PORTION OF THE PORTFOLIO NORMALLY WILL BE HELD
IN DOLLARS OR SHORT-TERM INTEREST-BEARING DOLLAR-DENOMINATED SECURITIES TO
PROVIDE FOR POSSIBLE REDEMPTIONS. THERE CAN BE NO ASSURANCE THAT THE FUND'S
OBJECTIVE WILL BE ACHIEVED. See "Investment Objective and Policies" in the
Statement of Additional Information.

THE FUND'S INVESTMENT OBJECTIVE IS A FUNDAMENTAL POLICY AND MAY NOT BE CHANGED
WITHOUT THE APPROVAL OF THE HOLDERS OF A MAJORITY OF THE FUND'S OUTSTANDING
VOTING SECURITIES, AS DEFINED IN THE INVESTMENT COMPANY ACT. FUND POLICIES THAT
ARE NOT FUNDAMENTAL MAY BE MODIFIED BY THE BOARD OF DIRECTORS.

UNDER NORMAL CIRCUMSTANCES, THE FUND MAY INVEST UP TO 35% OF ITS TOTAL ASSETS
IN THE SECURITIES OF ISSUERS DOMICILED OUTSIDE OF THE PACIFIC BASIN REGION. For
example, the Fund may invest in a company outside of the Pacific Basin region
when the Fund's investment adviser believes at the time of investment that the
value of the company's securities may be enhanced by conditions or developments
in the Pacific Basin region even though the company's production facilities are
located outside of the Pacific Basin region.

THE FUND MAY INVEST IN SECURITIES NOT LISTED ON SECURITIES EXCHANGES. THESE
SECURITIES WILL GENERALLY HAVE AN ESTABLISHED MARKET (SUCH AS THE
OVER-THE-COUNTER MARKET), THE DEPTH AND LIQUIDITY OF WHICH MAY VARY FROM TIME TO
TIME AND FROM SECURITY TO SECURITY. THE FUND MAY INVEST UP TO 5% OF ITS NET
ASSETS (DETERMINED AT THE TIME OF INVESTMENT) IN SECURITIES FOR WHICH MARKET
QUOTATIONS ARE NOT READILY AVAILABLE AND IN REPURCHASE AGREEMENTS WHICH HAVE A
MATURITY LONGER THAN SEVEN DAYS. THE FUND MAY FROM TIME TO TIME LEND ITS
PORTFOLIO SECURITIES TO BROKERS OR DEALERS, BANKS OR OTHER RECOGNIZED
INSTITUTIONAL BORROWERS OF SECURITIES AND MAY INVEST TO A LIMITED EXTENT IN
SECURITIES OF COMPANIES THAT HAVE BEEN IN EXISTENCE FOR LESS THAN THREE YEARS
AND IN SECURITIES OF OTHER REGISTERED INVESTMENT COMPANIES. See "Investment
Restrictions" in the Statement of Additional Information.

In addition to analyzing the companies in which investments are made, the
investment adviser also considers such factors as prospects for economic growth
for each foreign country; expected levels of inflation and interest rates;
government policies influencing business conditions; the range of individual
investment opportunities available to international investors; and other
pertinent financial, tax, social, political and national factors--all in
relation to the prevailing prices of securities in each country.

IN ADDITION TO PURCHASING EQUITY SECURITIES OF PACIFIC BASIN REGION ISSUERS,
THE FUND MAY INVEST IN AMERICAN DEPOSITARY RECEIPTS (ADRS), EUROPEAN DEPOSITARY
RECEIPTS (EDRS) OR OTHER SECURITIES CONVERTIBLE INTO SECURITIES OF

6
<PAGE>
CORPORATIONS DOMICILED IN PACIFIC BASIN REGION COUNTRIES. These securities may
not necessarily be denominated in the same currency as the securities into which
they may be converted. Generally, ADRs, in registered form, are designed for use
in the United States securities markets and EDRs, in bearer form, are designed
for use in European securities markets.

THE FUND MAY INVEST UP TO 5% OF ITS NET ASSETS IN WARRANTS. A warrant gives
the holder thereof the right to subscribe by a specified date to a stated number
of shares of stock of the issuer at a fixed price. Warrants tend to be more
volatile than the underlying stock, and if at a warrant's expiration date the
stock is trading at a price below the price set in the warrant, the warrant will
expire worthless. Conversely, if at the expiration date the underlying stock is
trading at a price higher than the price set in the warrant, the Fund can
acquire the stock at a price below its market value.

IN ADDITION TO THE PACIFIC BASIN REGION COUNTRIES LISTED ABOVE, THE FUND MAY
INVEST DIRECTLY IN TAIWAN, INDIA, PAKISTAN, VIETNAM AND THE PEOPLE'S REPUBLIC OF
CHINA, IF AND WHEN THEIR RESPECTIVE STOCK MARKETS BECOME OPEN TO DIRECT FOREIGN
INVESTMENT AND SUBJECT TO LOCAL RESTRICTIONS. COMPANIES LOCATED IN THOSE
COUNTRIES IN WHICH THE FUND MIGHT INVEST MAY HAVE LIMITED PRODUCT LINES, MARKETS
OR FINANCIAL RESOURCES AND MAY LACK MANAGEMENT DEPTH. THE SECURITIES OF THESE
COMPANIES MAY HAVE LIMITED MARKETABILITY AND MAY BE SUBJECT TO MORE ABRUPT OR
ERRATIC MARKET MOVEMENTS THAN SECURITIES OF LARGER, MORE ESTABLISHED COMPANIES
OR THE MARKET AVERAGES IN GENERAL. Due to restrictions on direct investment in
equity securities in those countries, the Fund may currently invest in such
markets only through a limited number of approved vehicles. At present, this
includes investments through listed and unlisted funds. Investment in such funds
is subject to limitations under the Investment Company Act of 1940, as amended
(the Investment Company Act), and market availability and may involve the
payment of substantial premiums above the value of such funds' portfolio
securities. The yield of such securities will be reduced by operating expenses
of such funds. To the extent to which such vehicles would be treated as "passive
foreign investment companies" under the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code), the Fund may further limit its investments
in order to avoid adverse U.S. federal income tax consequences.

AS INDICATED ABOVE, WHEN CONDITIONS DICTATE A DEFENSIVE STRATEGY, THE FUND MAY
INVEST, WITHOUT LIMIT, IN HIGH QUALITY MONEY MARKET INSTRUMENTS OF UNITED STATES
AND NON-UNITED STATES ISSUERS (INCLUDING, WITH RESPECT TO UNITED STATES ISSUERS,
REPURCHASE AGREEMENTS MATURING IN SEVEN DAYS OR LESS). The Fund will only invest
in money market instruments that have short term ratings in at least the second
highest category by at least one Nationally Recognized Statistical Rating
Organization (NRSRO) or are issued by companies that have outstanding debt
securities rated BBB or higher, or its equivalent by an NRSRO or in unrated
securities of issuers that the Fund's investment adviser has determined to be of
comparable quality. Subsequent to its purchase by the Fund, a security may be
assigned a lower rating or cease to be rated. Such an event would not require
the elimination of the issue from the portfolio, but the investment adviser will
consider such an event in determining whether the Fund should continue to hold
the security in its portfolio. Securities rated Baa by Moody's Investors Service
Inc. (Moody's) or BBB by Standard & Poor's Ratings Group (S&P), for example,
although considered to be investment grade, lack outstanding investment
characteristics and, in fact, have speculative characteristics. See "Description
of Security Ratings" in the Statement of Additional Information.

RISKS AND SPECIAL CONSIDERATIONS OF INVESTING IN FOREIGN SECURITIES

FOREIGN SECURITIES INVOLVE CERTAIN RISKS, WHICH SHOULD BE CONSIDERED CAREFULLY
BY AN INVESTOR IN THE FUND. THESE RISKS INCLUDE POLITICAL OR ECONOMIC
INSTABILITY IN THE COUNTRY OF THE ISSUER, THE DIFFICULTY OF PREDICTING
INTERNATIONAL TRADE PATTERNS, THE POSSIBILITY OF IMPOSITION OF EXCHANGE CONTROLS
AND THE RISK OF CURRENCY FLUCTUATIONS. Such securities may be subject to greater
fluctuations in price than securities issued by U.S. corporations or issued or
guaranteed by the U.S. Government, its instrumentalities or agencies. In
addition, there may be less publicly available information about a foreign
company than about a domestic company. Foreign companies generally are not
subject to uniform accounting, auditing and financial reporting standards
comparable to those applicable to domestic companies. There is generally less

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<PAGE>
government regulation of securities exchanges, brokers and listed companies
abroad than in the United States and there is a possibility of expropriation,
confiscatory taxation or diplomatic developments which could affect investment.

ALTHOUGH THE FUND INTENDS TO INVEST PRIMARILY IN EQUITY SECURITIES, IT MAY
INVEST FROM TIME TO TIME IN DEBT SECURITIES OF FOREIGN ISSUERS. In many
instances, foreign debt securities may provide higher yields than securities of
domestic issuers which have similar maturities and quality. These investments,
however, may be less liquid than the securities of U.S. corporations. In the
event of default of any such foreign debt obligations, it may be more difficult
for the Fund to obtain or enforce a judgment against the issuers of such
securities.

ADDITIONAL COSTS COULD BE INCURRED IN CONNECTION WITH THE FUND'S INTERNATIONAL
INVESTMENT ACTIVITIES. Foreign brokerage commissions are generally higher than
in the United States. Increased custodian costs as well as administrative
difficulties (such as the applicability of foreign laws to foreign custodians in
various circumstances) may be associated with the maintenance of assets in
foreign jurisdictions.

If the security is denominated in a foreign currency, it will be affected by
changes in currency exchange rates and in exchange control regulations, and
costs will be incurred in connection with conversions between currencies. A
change in the value of any such currency against the U.S. dollar will result in
a corresponding change in the U.S. dollar value of the Fund's securities
denominated in that currency. Such changes also will affect the Fund's income
and distributions to shareholders. In addition, although the Fund will receive
income in such currencies, the Fund will be required to compute and distribute
its income in U.S. dollars. Therefore, if the exchange rate for any such
currency declines after the Fund's income has been accrued and translated into
U.S. dollars, the Fund could be required to liquidate portfolio securities to
make such distributions, particularly in instances in which the amount of income
the Fund is required to distribute is not immediately reduced by the decline in
such currency. Similarly, if an exchange rate declines between the time the Fund
incurs expenses in U.S. dollars and the time such expenses are paid, the amount
of such currency required to be converted into U.S. dollars in order to pay such
expenses in U.S. dollars will be greater than the equivalent amount in any such
currency of such expenses at the time they were incurred. The Fund may, but need
not, enter into futures contracts on foreign currencies, forward foreign
currency exchange contracts and options on foreign currencies for hedging
purposes, including: locking-in the U.S. dollar price of the purchase or sale of
securities denominated in a foreign currency; locking-in the U.S. dollar
equivalent of interest or dividends to be paid on such securities which are held
by the Fund; and protecting the U.S. dollar value of such securities which are
held by the Fund.

SHAREHOLDERS SHOULD BE AWARE THAT INVESTING IN THE EQUITY AND FIXED-INCOME
MARKETS OF DEVELOPING COUNTRIES GENERALLY INVOLVES EXPOSURE TO ECONOMIES THAT
ARE GENERALLY LESS DIVERSE AND MATURE, AND TO POLITICAL SYSTEMS WHICH CAN BE
EXPECTED TO HAVE LESS STABILITY THAN THOSE OF DEVELOPED COUNTRIES. HISTORICAL
EXPERIENCE INDICATES THAT THE MARKETS OF DEVELOPING COUNTRIES HAVE BEEN MORE
VOLATILE THAN THE MARKETS OF DEVELOPED COUNTRIES. THE FUND IS ALSO SUSCEPTIBLE
TO POLITICAL AND ECONOMIC FACTORS AFFECTING ISSUERS IN PACIFIC BASIN COUNTRIES.
MANY OF THE COUNTRIES IN THE PACIFIC BASIN ARE DEVELOPING BOTH POLITICALLY AND
ECONOMICALLY AND MAY HAVE RELATIVELY UNSTABLE GOVERNMENTS, ECONOMIES BASED ON
ONLY A FEW COMMODITIES OR INDUSTRIES, AND SECURITIES MARKETS TRADING
INFREQUENTLY OR IN LOW VOLUME. SOME PACIFIC BASIN COUNTRIES MAY ALSO RESTRICT
THE EXTENT TO WHICH FOREIGNERS MAY INVEST IN THEIR SECURITIES MARKETS.

HEDGING AND INCOME ENHANCEMENT STRATEGIES

THE FUND MAY ALSO ENGAGE IN VARIOUS PORTFOLIO STRATEGIES, INCLUDING INVESTING
IN DERIVATIVES, TO REDUCE CERTAIN RISKS OF ITS INVESTMENTS AND TO ATTEMPT TO
ENHANCE INCOME. These strategies currently include the use of options, forward
currency exchange contracts and futures contracts and options thereon. The
Fund's ability to use these strategies may be limited by market conditions,
regulatory limits and tax considerations and there can be no assurance that any
of these strategies will succeed. See "Investment Objective and Policies" and
"Taxes" in the Statement of Additional Information.

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<PAGE>
New financial products and risk management techniques continue to be developed
and the Fund may use these new investments and techniques to the extent
consistent with its investment objective and policies.

OPTIONS TRANSACTIONS

THE FUND MAY PURCHASE AND WRITE (I.E., SELL) PUT AND CALL OPTIONS ON
SECURITIES AND CURRENCIES THAT ARE TRADED ON U.S. OR FOREIGN SECURITIES
EXCHANGES OR IN THE OVER-THE-COUNTER MARKET TO ENHANCE INCOME OR TO HEDGE THE
FUND'S PORTFOLIO. THESE OPTIONS WILL BE ON EQUITY SECURITIES, FINANCIAL INDICES
(E.G., S&P 500) AND FOREIGN CURRENCIES. The Fund may write covered put and call
options to generate additional income through the receipt of premiums, purchase
put options in an effort to protect the value of a security that it owns against
a decline in market value and purchase call options in an effort to protect
against an increase in the price of securities (or currencies) it intends to
purchase. The Fund may also purchase put and call options to offset previously
written put and call options of the same series. See "Investment Objective and
Policies--Options on Securities" in the Statement of Additional Information.

A CALL OPTION GIVES THE PURCHASER, IN EXCHANGE FOR A PREMIUM PAID, THE RIGHT
FOR A SPECIFIED PERIOD OF TIME TO PURCHASE THE SECURITIES OR CURRENCY SUBJECT TO
THE OPTION AT A SPECIFIED PRICE (THE EXERCISE PRICE OR STRIKE PRICE). The writer
of a call option, in return for the premium, has the obligation, upon exercise
of the option, to deliver, depending upon the terms of the option contract, the
underlying securities or a specified amount of cash to the purchaser upon
receipt of the exercise price. When the Fund writes a call option, the Fund
gives up the potential for gain on the underlying securities or currency in
excess of the exercise price of the option during the period that the option is
open.

A PUT OPTION GIVES THE PURCHASER, IN RETURN FOR A PREMIUM, THE RIGHT, FOR A
SPECIFIED PERIOD OF TIME, TO SELL THE SECURITIES OR CURRENCY SUBJECT TO THE
OPTION TO THE WRITER OF THE PUT AT THE SPECIFIED EXERCISE PRICE. The writer of
the put option, in return for the premium, has the obligation, upon exercise of
the option, to acquire the securities or currency underlying the option at the
exercise price. The Fund might, therefore, be obligated to purchase the
underlying securities or currency for more than their current market price.

THE FUND WILL WRITE ONLY "COVERED" OPTIONS. An option is covered if, so long
as the Fund is obligated under the option, it owns an offsetting position in the
underlying security or currency or maintains cash, U.S. Government securities or
other liquid high-grade debt obligations with a value sufficient at all times to
cover its obligations in a segregated account. See "Investment Objective and
Policies--Options on Securities" in the Statement of Additional Information.
There is no limitation on the amount of call options the Fund may write. The
Fund has undertaken with certain state securities commissions that, so long as
shares of the Fund are registered in those states, it will not (a) write puts
having aggregate exercise prices greater than 25% of total net assets, or (b)
purchase (i) put options on stocks not held in the Fund's portfolio, (ii) put
options on stock indices or foreign currencies or (iii) call options on stock,
stock indices or foreign currencies if, after any such purchase, the aggregate
premiums paid for such options would exceed 10% of the Fund's total assets;
provided, however, that the Fund may purchase put options on stocks held by the
Fund if after such purchase the aggregate premiums paid for such options do not
exceed 20% of the Fund's total assets. The aggregate value of the obligations
underlying put options will not exceed 50% of the Fund's assets.

FORWARD CURRENCY EXCHANGE CONTRACTS

THE FUND MAY ENTER INTO FORWARD FOREIGN CURRENCY EXCHANGE CONTRACTS TO PROTECT
THE VALUE OF ITS ASSETS AGAINST FUTURE CHANGES IN THE LEVEL OF CURRENCY EXCHANGE
RATES. The Fund may enter into such contracts on a spot, i.e., cash, basis at
the rate then prevailing in the currency exchange market or on a forward basis,
by entering into a forward contract to purchase or sell currency. A forward
contract on foreign currency is an obligation to purchase or sell a specific
currency at a future date, which may be any fixed number of days agreed upon by
the parties from the date of the contract at a price set on the date of the
contract.

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<PAGE>
THE FUND'S DEALINGS IN FORWARD CONTRACTS WILL BE LIMITED TO HEDGING INVOLVING
EITHER SPECIFIC TRANSACTIONS OR PORTFOLIO POSITIONS. Transaction hedging is the
purchase or sale of a forward contract with respect to specific receivables or
payables of the Fund generally arising in connection with the purchase or sale
of its portfolio securities and accruals of interest or dividends receivable and
Fund expenses. Position hedging is the sale of a foreign currency with respect
to portfolio security positions denominated or quoted in that currency or in a
currency bearing a substantial correlation to the value of that currency (cross
hedge). Although there are no limits on the number of forward contracts which
the Fund may enter into, the Fund may not position hedge (including cross
hedges) with respect to a particular currency for an amount greater than the
aggregate market value (determined at the time of making any sale of forward
currency) of the securities being hedged. See "Investment Objective and
Policies--Risks Related to Forward Currency Exchange Contracts" in the Statement
of Additional Information.

FUTURES CONTRACTS AND OPTIONS THEREON

THE FUND MAY PURCHASE AND SELL FINANCIAL FUTURES CONTRACTS AND OPTIONS THEREON
WHICH ARE TRADED ON A COMMODITIES EXCHANGE OR BOARD OF TRADE FOR CERTAIN
HEDGING, RETURN ENHANCEMENT AND RISK MANAGEMENT PURPOSES IN ACCORDANCE WITH
REGULATIONS OF THE COMMODITY FUTURES TRADING COMMISSION. These futures contracts
and related options will be on financial indices and foreign currencies or
groups of foreign currencies such as the European Currency Unit. A European
Currency Unit is a basket of specified amounts of the currencies of certain
member states of the European Economic Community, a Western European economic
cooperative organization including France, Germany, the Netherlands and the
United Kingdom. A financial futures contract is an agreement to purchase or sell
an agreed amount of securities or currencies at a set price for delivery in the
future.

The Fund may not purchase or sell futures contracts and related options for
return enhancement or risk management purposes, if immediately thereafter the
sum of the amount of initial margin deposits on the Fund's existing futures and
options on futures and premiums paid for such related options would exceed 5% of
the liquidation value of the Fund's total assets. The Fund may purchase and sell
futures contracts and related options, without limitation, for bona fide hedging
purposes. The value of all futures contracts sold will not exceed the total
market value of the Fund's portfolio.

THE FUND'S SUCCESSFUL USE OF FUTURES CONTRACTS AND RELATED OPTIONS DEPENDS
UPON THE INVESTMENT ADVISER'S ABILITY TO PREDICT THE DIRECTION OF THE MARKET AND
IS SUBJECT TO VARIOUS ADDITIONAL RISKS. The correlation between movements in the
price of a futures contract and the movements in the index or price of the
currencies being hedged is imperfect and there is a risk that the value of the
indicies or currencies being hedged may increase or decrease at a greater rate
than the related futures contracts resulting in losses to the Fund. Certain
futures exchanges or boards of trade have established daily limits on the amount
that the price of futures contracts or related options may vary, either up or
down, from the previous day's settlement price. These daily limits may restrict
the Fund's ability to purchase or sell certain futures contracts or related
options on any particular day.

The Fund's ability to enter into futures contracts and options thereon is
limited by the requirements of the Internal Revenue Code for qualification as a
regulated investment company. See "Taxes" in the Statement of Additional
Information.

RISKS OF HEDGING AND INCOME ENHANCEMENT STRATEGIES

PARTICIPATION IN THE OPTIONS OR FUTURES MARKETS AND IN CURRENCY EXCHANGE
TRANSACTIONS INVOLVES INVESTMENT RISKS AND TRANSACTION COSTS TO WHICH THE FUND
WOULD NOT BE SUBJECT ABSENT THE USE OF THESE STRATEGIES. If the investment
adviser's predictions of movements in the direction of the securities, foreign
currency and interest rate markets are inaccurate, the adverse consequences to
the Fund may leave the Fund in a worse position than if such strategies were not
used. Risks inherent in the use of options, foreign currency and futures
contracts and options on futures contracts include (1) dependence on the
investment adviser's ability to predict correctly movements in the direction of
interest rates, securities prices and currency markets; (2) imperfect
correlation between the price of options and futures contracts and options

10
<PAGE>
thereon and movements in the prices of the securities or currencies being
hedged; (3) the fact that skills needed to use these strategies are different
from those needed to select portfolio securities; (4) the possible absence of a
liquid secondary market for any particular instrument at any time; (5) the
possible need to defer closing out certain hedged positions to avoid adverse tax
consequences; and (6) the possible inability of the Fund to purchase or sell a
portfolio security at a time that otherwise would be favorable for it to do so,
or the possible need for the Fund to sell a portfolio security at a
disadvantageous time, due to the need for the Fund to maintain "cover" or to
segregate securities in connection with hedging transactions. See "Taxes" in the
Statement of Additional Information.

The Fund will generally purchase options and futures on an exchange only if
there appears to be a liquid secondary market for such options or futures; the
Fund will generally purchase OTC options only if management believes that the
other party to the options will continue to make a market for such options.
However, there can be no assurance that a liquid secondary market will continue
to exist or that the other party will continue to make a market. Thus, it may
not be possible to close an options or futures transaction. The inability to
close options and futures positions also could have an adverse impact on the
Fund's ability to effectively hedge its portfolio. There is also the risk of
loss by the Fund of margin deposits or collateral in the event of bankruptcy of
a broker with whom the Fund has an open position in an option, a futures
contract or related option.

OTHER INVESTMENTS AND POLICIES

REPURCHASE AGREEMENTS

The Fund will enter into repurchase agreements, whereby the seller of the
security agrees to repurchase that security from the Fund at a mutually
agreed-upon time and price. The repurchase date is usually within a day or two
of the original purchase, although it may extend over a number of months. The
Fund's repurchase agreements will at all times be fully collateralized in an
amount at least equal to the purchase price of the underlying securities
(including accrued interest earned thereon). In the event of a default or
bankruptcy by a seller, the Fund will promptly seek to liquidate the collateral.
To the extent that the proceeds from any sale of such collateral upon a default
in the obligation to repurchase are less than the repurchase price, the Fund
will suffer a loss. The Fund participates in a joint repurchase account with
other investment companies managed by Prudential Mutual Fund Management, Inc.
pursuant to an order of the Securities and Exchange Commission (SEC). See
"Investment Objective and Policies--Repurchase Agreements" in the Statement of
Additional Information.

BORROWING

The Fund may borrow an amount equal to no more than 20% of the value of its
total assets (calculated when the loan is made) from banks for temporary,
extraordinary or emergency purposes or for the clearance of transactions. The
Fund may pledge up to 20% of its total assets to secure these borrowings.

ILLIQUID SECURITIES

The Fund may invest up to 5% of its net assets in illiquid securities
including repurchase agreements which have a maturity of longer than seven days,
securities with legal or contractual restrictions on resale (restricted
securities), securities that are not readily marketable in securities markets
either within or outside of the United States and privately placed commercial
paper. Restricted securities eligible for resale pursuant to Rule 144A under the
Securities Act of 1933, as amended (the Securities Act) that have a readily
available market are not considered illiquid for purposes of this limitation.
The investment adviser will monitor the liquidity of such restricted securities
under the supervision of the Board of Directors. Repurchase agreements subject
to demand are deemed to have a maturity equal to the applicable notice period.

The staff of the SEC has taken the position that over-the-counter options and
the assets used as "cover" for written over-the-counter options are illiquid
securities unless the Fund and the counterparty have provided for the Fund, at
the Fund's

11
<PAGE>
election, to unwind the over-the-counter option. The exercise of such an option
ordinarily would involve the payment by the Fund of an amount designed to
reflect the counterparty's economic loss from an early termination, but does
allow the Fund to treat the assets used as "cover" as "liquid."

PORTFOLIO TURNOVER

As a result of the Fund's investment policies, its portfolio turnover rate may
exceed 100%, although the rate is not expected to exceed 200%. High portfolio
turnover (over 100%) may involve correspondingly greater brokerage commissions
and other transaction costs, which will be borne directly by the Fund. See
"Portfolio Transactions and Brokerage" in the Statement of Additional
Information. In addition, high portfolio turnover may result in increased
short-term capital gains, which, when distributed to shareholders, are treated
as ordinary income. See "Taxes, Dividends and Distributions."

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

The Fund may purchase or sell securities on a when-issued or delayed delivery
basis. When-issued or delayed delivery transactions arise when securities are
purchased or sold by the Fund with payment and delivery taking place a month or
more in the future in order to secure what is considered to be an advantageous
price and yield to the Fund at the time of entering into the transaction. While
the Fund will only purchase securities on a when-issued or delayed delivery
basis with the intention of acquiring the securities, the Fund may sell the
securities before the settlement date, if it is deemed advisable. At the time
the Fund makes the commitment to purchase securities on a when-issued or delayed
delivery basis, the Fund will record the transaction and thereafter reflect the
value, each day, of such security in determining the net asset value of the
Fund. At the time of delivery of the securities, the value may be more or less
than the purchase price. The Fund's Custodian will maintain, in a segregated
account of the Fund, cash, U.S. Government securities or other liquid high-grade
debt obligations having a value equal to or greater than the Fund's purchase
commitments; the Custodian will likewise segregate securities sold on a delayed
delivery basis. Subject to this requirement, the Fund may purchase securities on
such basis without limit. See "Investment Objective and Policies--When-Issued
and Delayed Delivery Securities" in the Statement of Additional Information.

SECURITIES LENDING

The Fund may lend its portfolio securities to brokers or dealers, banks or
other recognized institutional borrowers of securities, provided that the
borrower at all times maintains cash or equivalent collateral or secures a
letter of credit in favor of the Fund in an amount equal to at least 100%,
determined daily, of the market value of the securities loaned which are
maintained in a segregated account pursuant to applicable regulations. During
the time portfolio securities are on loan, the borrower will pay the Fund an
amount equivalent to any dividend or interest paid on such securities and the
Fund may invest the cash collateral and earn additional income, or it may
receive an agreed-upon amount of interest income from the borrower. As with any
extensions of credit, there are risks of delay in recovery and in some cases
loss of rights in the collateral should the borrower of the securities fail
financially. As a matter of fundamental policy, the Fund cannot lend more than
30% of the value of its total assets. See "Investment Objective and
Policies--Lending of Securities" in the Statement of Additional Information.

INVESTMENT RESTRICTIONS

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

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<PAGE>
HOW THE FUND IS MANAGED

THE FUND HAS A BOARD OF DIRECTORS WHICH, IN ADDITION TO OVERSEEING THE
ACTIONS OF THE FUND'S MANAGER, SUBADVISER AND DISTRIBUTOR, DECIDES UPON MATTERS
OF GENERAL POLICY. THE FUND'S MANAGER CONDUCTS AND SUPERVISES THE DAILY BUSINESS
OPERATIONS OF THE FUND. THE FUND'S SUBADVISER FURNISHES DAILY INVESTMENT
ADVISORY SERVICES.

For the fiscal year ended October 31, 1994, the total expenses as a percentage
of average net assets for the Fund's Class A, Class B and Class C shares were
1.57%, 2.33% and 3.00%, (annualized) respectively. See "Financial Highlights."

MANAGER

PRUDENTIAL MUTUAL FUND MANAGEMENT, INC. (PMF OR THE MANAGER), ONE SEAPORT
PLAZA, NEW YORK, NEW YORK 10292, IS THE MANAGER OF THE FUND AND IS COMPENSATED
FOR ITS SERVICES AT AN ANNUAL RATE OF .75 OF 1% OF THE FUND'S AVERAGE DAILY NET
ASSETS. It was incorporated in May 1987 under the laws of the State of Delaware.
For the fiscal year ended October 31, 1994, the Fund paid management fees to PMF
of 0.75% of the Fund's average net assets. See "Manager" in the Statement of
Additional Information.

As of November 30, 1994, PMF served as the manager to 38 open-end investment
companies, constituting all of the Prudential Mutual Funds, and as manager or
administrator to 30 closed-end investment companies with aggregate assets of
approximately $47 billion.

UNDER THE MANAGEMENT AGREEMENT WITH THE FUND, PMF MANAGES THE INVESTMENT
OPERATIONS OF THE FUND AND ALSO ADMINISTERS THE FUND'S CORPORATE AFFAIRS. SEE
"MANAGER" IN THE STATEMENT OF ADDITIONAL INFORMATION.

UNDER A SUBADVISORY AGREEMENT BETWEEN PMF AND THE PRUDENTIAL INVESTMENT
CORPORATION (PIC OR THE SUBADVISER), PIC FURNISHES INVESTMENT ADVISORY SERVICES
IN CONNECTION WITH THE MANAGEMENT OF THE FUND AND IS REIMBURSED BY PMF FOR ITS
REASONABLE COSTS AND EXPENSES INCURRED IN PROVIDING SUCH SERVICES. Under the
Management Agreement, PMF continues to have responsibility for all investment
advisory services and supervises PIC's performance of such services.

The current portfolio manager of the Fund is Daniel J. Duane, a Managing
Director and Chief Investment Officer for Global Equity Investments of
Prudential Investment Advisors, a unit of PIC. Mr. Duane has responsibility for
the day-to-day management of the Fund's portfolio. Mr. Duane has managed the
Fund's portfolio since its inception in July 1992 and has been employed by PIC
as a portfolio manager since 1990. He was formerly with First Investors Asset
Management from 1986 to 1990 as senior portfolio manager and head of global
equity investments. Mr. Duane is a Chartered Financial Analyst. Mr. Duane also
serves as the portfolio manager of the Prudential Series Fund Global Equity
Portfolio, Prudential Global Fund, Prudential Europe Growth Fund and Prudential
Global Genesis Fund.

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

DISTRIBUTOR

PRUDENTIAL MUTUAL FUND DISTRIBUTORS, INC. (PMFD), ONE SEAPORT PLAZA, NEW YORK,
NEW YORK 10292, IS A CORPORATION ORGANIZED UNDER THE LAWS OF THE STATE OF
DELAWARE AND SERVES AS THE DISTRIBUTOR OF THE CLASS A SHARES OF THE FUND. IT IS
A WHOLLY-OWNED SUBSIDIARY OF PMF.

PRUDENTIAL SECURITIES INCORPORATED (PRUDENTIAL SECURITIES OR PSI), ONE SEAPORT
PLAZA, NEW YORK, NEW YORK 10292, IS A CORPORATION ORGANIZED UNDER THE LAWS OF
THE STATE OF DELAWARE AND SERVES AS THE DISTRIBUTOR OF THE CLASS B AND CLASS C
SHARES OF THE FUND. IT IS AN INDIRECT, WHOLLY-OWNED SUBSIDIARY OF PRUDENTIAL.

UNDER SEPARATE DISTRIBUTION AND SERVICE PLANS (THE CLASS A PLAN, THE CLASS B
PLAN AND THE CLASS C PLAN, COLLECTIVELY, THE PLANS) ADOPTED BY THE FUND UNDER
RULE 12B-1 UNDER THE INVESTMENT COMPANY ACT AND SEPARATE

13
<PAGE>
DISTRIBUTION AGREEMENTS (THE DISTRIBUTION AGREEMENTS), PMFD AND PRUDENTIAL
SECURITIES (COLLECTIVELY, THE DISTRIBUTOR) INCUR THE EXPENSES OF DISTRIBUTING
THE FUND'S CLASS A, CLASS B AND CLASS C SHARES. These expenses include
commissions and account servicing fees paid to, or on account of, financial
advisers of Prudential Securities and representatives of Pruco Securities
Corporation (Prusec), an affiliated broker-dealer, commissions and account
servicing fees paid to, or on account of, other broker-dealers or financial
institutions (other than national banks) which have entered into agreements with
the Distributor, advertising expenses, the cost of printing and mailing
prospectuses to potential investors and indirect and overhead costs of
Prudential and Prusec associated with the sale of Fund shares, including lease,
utility, communications and sales promotion expenses. The State of Texas
requires that shares of the Fund may be sold in that state only by dealers or
other financial institutions which are registered there as broker-dealers.

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

UNDER THE CLASS A PLAN, THE FUND MAY PAY PMFD FOR ITS DISTRIBUTION-RELATED
ACTIVITIES WITH RESPECT TO CLASS A SHARES AT AN ANNUAL RATE OF UP TO .30 OF 1%
OF THE AVERAGE DAILY NET ASSETS OF THE CLASS A SHARES. The Class A Plan provides
that (i) up to .25 of 1% of the daily net assets of the Class A shares may be
used to pay for personal service and/or the maintenance of shareholder accounts
(service fee) and (ii) total distribution fees (including the service fee of .25
of 1%) may not exceed .30 of 1% of the average daily net assets of the Class A
shares. PMFD has agreed to limit its distribution-related fees payable under the
Class A Plan to .25 of 1% of the average daily net assets of the Class A shares
for the fiscal year ending October 31, 1995.

For the fiscal year ended October 31, 1994, PMFD received payments of $224,701
under the Class A Plan. This amount was primarily expended for payment of
account servicing fees to financial advisers and other persons who sell Class A
shares. For the fiscal year ended October 31, 1994, PMFD also received
approximately $1,380,600 in initial sales charges.

UNDER THE CLASS B AND CLASS C PLANS, THE FUND PAYS PRUDENTIAL SECURITIES FOR
ITS DISTRIBUTION-RELATED ACTIVITIES WITH RESPECT TO CLASS B AND CLASS C SHARES
AT AN ANNUAL RATE OF 1% OF THE AVERAGE DAILY NET ASSETS OF EACH OF THE CLASS B
AND CLASS C SHARES. The Class B and Class C Plans provide for the payment to
Prudential Securities of (i) an asset-based sales charge of .75 of 1% of the
average daily net assets of each of the Class B and Class C shares, and (ii) a
service fee of .25 of 1% of the average daily net assets of each of the Class B
and Class C shares. The service fee is used to pay for personal service and/or
the maintenance of shareholder accounts. Prudential Securities also receives
contingent deferred sales charges from certain redeeming shareholders. See
"Shareholder Guide--How to Sell Your Shares-- Contingent Deferred Sales
Charges."

For the fiscal year ended October 31, 1994, Prudential Securities incurred
distribution expenses of approximately $8,137,500 under the Class B Plan and
received $4,045,063 from the Fund under the Class B Plan. In addition Prudential
Securities received approximately $1,080,500 in contingent deferred sales
charges from redemptions of Class B shares during this period.

For the period August 1, 1994 through October 31, 1994 Prudential Securities
incurred distribution expenses of approximately $6,600 under the Class C Plan
and received $1,128 from the Fund under the Class C Plan.

For the fiscal year ended October 31, 1994, the Fund paid distribution
expenses of .25%, 1%, and 1% of the average net assets of the Class A, Class B
and Class C shares, respectively. The Fund records all payments made under the
Plans as expenses in the calculation of net investment income. Prior to August
1, 1994, the Class A and Class B Plans operated as "reimbursement type" plans
and, in the case of Class B, provided for the reimbursement of distribution
expenses incurred in current and prior years. See "Distributor" in the Statement
of Additional Information.

14
<PAGE>
Distribution expenses attributable to the sale of shares of the Fund will be
allocated to each class based upon the ratio of sales of each class to the sales
of all shares of the Fund other than expenses allocable to a particular class.
The distribution fee and sales charge of one class will not be used to subsidize
the sale of another class.

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

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

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

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

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

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

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

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

15
<PAGE>
FEE WAIVERS AND SUBSIDY

PMF may from time to time waive all or a portion of its management fee and
subsidize all or a portion of the operating expenses of the Fund. Fee waivers
and expense subsidies will increase the Fund's total return. See "Performance
Information" in the Statement of Additional Information and "Fund Expenses."

PORTFOLIO TRANSACTIONS

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

CUSTODIAN AND TRANSFER AND DIVIDEND DISBURSING AGENT

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

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

HOW THE FUND VALUES ITS SHARES

THE FUND'S NET ASSET VALUE PER SHARE OR NAV IS DETERMINED BY SUBTRACTING ITS
LIABILITIES FROM THE VALUE OF ITS ASSETS AND DIVIDING THE REMAINDER BY THE
NUMBER OF OUTSTANDING SHARES. NAV IS CALCULATED SEPARATELY FOR EACH CLASS. For
valuation purposes, quotations of foreign securities in a foreign currency are
converted to U.S. dollar equivalents. THE BOARD OF DIRECTORS HAS FIXED THE
SPECIFIC TIME OF DAY FOR THE COMPUTATION OF THE FUND'S NAV TO BE AS OF 4:15
P.M., NEW YORK TIME.

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

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

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

HOW THE FUND CALCULATES PERFORMANCE

FROM TIME TO TIME THE FUND MAY ADVERTISE ITS TOTAL RETURN (INCLUDING "AVERAGE
ANNUAL" TOTAL RETURN AND "AGGREGATE" TOTAL RETURN) AND YIELD IN ADVERTISEMENTS
OR SALES LITERATURE. TOTAL RETURN AND YIELD ARE CALCULATED

16
<PAGE>
SEPARATELY FOR CLASS A, CLASS B AND CLASS C SHARES. These figures are based on
historical earnings and are not intended to indicate future performance. The
"total return" shows how much an investment in the Fund would have increased
(decreased) over a specified period of time (i.e., one, five, or ten years or
since inception of the Fund) assuming that all distributions and dividends by
the Fund were reinvested on the reinvestment dates during the period and less
all recurring fees. The "aggregate" total return reflects actual performance
over a stated period of time. "Average annual" total return is a hypothetical
rate of return that, if achieved annually, would have produced the same
aggregate total return if performance had been constant over the entire period.
"Average annual" total return smooths out variations in performance and takes
into account any applicable initial or contingent deferred sales charges.
Neither "average annual" total return nor "aggregate" total return takes into
account any federal or state income taxes which may be payable upon redemption.
The "yield" refers to the income generated by an investment in the Fund over a
one-month or 30-day period. This income is then "annualized;" that is, the
amount of income generated by the investment during that 30-day period is
assumed to be generated each 30-day period for twelve periods and is shown as a
percentage of the investment. The income earned on the investment is also
assumed to be reinvested at the end of the sixth 30-day period. The Fund may
also from time to time advertise its 30-day yield. See "Performance Information"
in the Statement of Additional Information. The Fund also may include
comparative performance information in advertising or marketing the Fund's
shares. Such performance information may include data from Lipper Analytical
Services, Inc., Morningstar Publications, Inc., other industry publications,
business periodicals and market Indices. See "Performance Information" in the
Statement of Additional Information. The Fund will include performance data for
each class of shares of the Fund in any advertisement or information including
performance data of the Fund. Further performance information is contained in
the Fund's annual and semi-annual reports to shareholders, which may be obtained
without charge. See "Shareholder Guide--Shareholder Services--Reports to
Shareholders."

TAXES, DIVIDENDS AND DISTRIBUTIONS

TAXATION OF THE FUND

THE FUND HAS ELECTED TO QUALIFY AND INTENDS TO REMAIN QUALIFIED AS A REGULATED
INVESTMENT COMPANY UNDER THE INTERNAL REVENUE CODE. ACCORDINGLY THE FUND WILL
NOT BE SUBJECT TO FEDERAL INCOME TAXES ON ITS NET INVESTMENT INCOME AND CAPITAL
GAINS, IF ANY, THAT IT DISTRIBUTES TO ITS SHAREHOLDERS.

The Fund may, from time to time, invest in Passive Foreign Investment
Companies (PFICs). PFICs are foreign corporations which derive a majority of
their income from passive sources. For tax purposes, the Fund's investments in
PFICs are subject to special tax provisions that may result in the taxation of
certain gains realized by the Fund. See "Taxes" in the Statement of Additional
Information.

In addition, under the Internal Revenue Code, special rules apply to the
treatment of certain options and futures contracts (Section 1256 contracts). At
the end of each year, such investments held by the Fund will be required to be
"marked to market" for federal income tax purposes; that is, treated as having
been sold at market value. Sixty percent of any gain or loss recognized on these
"deemed sales" and on actual dispositions may be treated as long-term capital
gain or loss, and the remainder will be treated as short-term capital gain or
loss. See "Taxes" in the Statement of Additional Information.

TAXATION OF SHAREHOLDERS

Any dividends out of net taxable investment income, together with
distributions of net short-term gains (i.e., the excess of net short-term
capital gains over net long-term capital losses) distributed to shareholders,
will be taxable as ordinary income to the shareholder whether or not reinvested.
Any net capital gains (i.e., the excess of net long-term capital gains over net

17
<PAGE>
short-term capital losses) distributed to shareholders will be taxable as
long-term capital gains to the shareholders, whether or not reinvested and
regardless of the length of time a shareholder has owned his or her shares. The
maximum long-term capital gains rate for individuals is 28%. The maximum
long-term capital gains rate for corporate shareholders is currently the same as
the maximum tax rate for ordinary income.

The Fund may incur foreign income taxes in connection with some of its foreign
investments. Certain of these taxes may be credited to shareholders. See "Taxes"
in the Statement of Additional Information.

Any gain or loss realized upon a sale or redemption of shares by a shareholder
who is not a dealer in securities will be treated as long-term capital gain or
loss if the shares have been held more than one year and otherwise as short-term
capital gain or loss. Any short-term capital loss will be treated as long-term
capital loss to the extent of any capital gain distributions received by the
shareholder regardless of the length of time such shares were held.

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

Shareholders are urged to consult their own tax advisers regarding specific
questions as to federal, state or local taxes. See "Taxes" in the Statement of
Additional Information.

WITHHOLDING TAXES

Under U.S. Treasury Regulations, the Fund is required to withhold and remit to
the U.S. Treasury 31% of dividend, capital gain income and redemption proceeds,
payable on the accounts of those shareholders who fail to furnish their tax
identification numbers on IRS Form W-9 (or IRS Form W-8 in the case of certain
foreign shareholders) with the required certifications regarding the
shareholder's status under the federal income tax law.

DIVIDENDS AND DISTRIBUTIONS

THE FUND EXPECTS TO PAY DIVIDENDS OF NET INVESTMENT INCOME, IF ANY, AND MAKE
DISTRIBUTIONS OF ANY CAPITAL GAINS IN EXCESS OF NET LONG-TERM CAPITAL LOSSES ON
AN ANNUAL BASIS. Dividends paid by the Fund with respect to each class of
shares, to the extent any dividends are paid, will be calculated in the same
manner, at the same time, on the same day and will be in the same amount except
that each class will bear its own distribution charges, generally resulting in
lower dividends for Class B and Class C shares. Distribution of net capital
gains, if any, will be paid in the same amount for each class of shares. See
"How the Fund Values its Shares."

DIVIDENDS AND DISTRIBUTIONS WILL BE PAID IN ADDITIONAL FUND SHARES, BASED ON
THE NAV OF EACH CLASS ON THE RECORD DATE OR SUCH OTHER DATE AS THE BOARD OF
DIRECTORS MAY DETERMINE, UNLESS THE SHAREHOLDER ELECTS IN WRITING NOT LESS THAN
FIVE BUSINESS DAYS PRIOR TO THE RECORD DATE TO RECEIVE SUCH DIVIDENDS AND
DISTRIBUTIONS IN CASH. Such election should be submitted to Prudential Mutual
Fund Services, Inc., Attn: Account Maintenance Unit, P.O. Box 15015, New
Brunswick, New Jersey 08906-5015. The Fund will notify each shareholder after
the close of the Fund's taxable year both of the dollar amount and the taxable
status of that year's dividends and distributions on a per share basis. If you
hold shares through Prudential Securities, you should contact your financial
advisor to elect to receive dividends and distributions in cash.

WHEN THE FUND GOES "EX-DIVIDEND," ITS NAV IS REDUCED BY THE AMOUNT OF THE
DIVIDEND OR DISTRIBUTION. IF YOU BUY SHARES JUST PRIOR TO THE EX-DIVIDEND DATE
(WHICH GENERALLY OCCURS FOUR BUSINESS DAYS PRIOR TO THE RECORD DATE), THE PRICE
YOU PAY WILL INCLUDE THE DIVIDEND OR DISTRIBUTION AND A PORTION OF YOUR
INVESTMENT WILL BE RETURNED TO YOU AS A TAXABLE DISTRIBUTION. YOU SHOULD,
THEREFORE, CONSIDER THE TIMING OF DIVIDENDS AND DISTRIBUTIONS WHEN MAKING YOUR
PURCHASES.

18
<PAGE>
GENERAL INFORMATION
DESCRIPTION OF COMMON STOCK

THE FUND WAS INCORPORATED IN MARYLAND ON AUGUST 14, 1991. THE FUND IS
AUTHORIZED TO ISSUE 2 BILLION SHARES OF COMMON STOCK, $.001 PAR VALUE PER SHARE,
DIVIDED INTO THREE CLASSES, DESIGNATED CLASS A, CLASS B AND CLASS C COMMON STOCK
EACH OF WHICH CONSISTS OF 666,666,666 2/3 AUTHORIZED SHARES. Each class of
common stock represents an interest in the same assets of the Fund and is
identical in all respects except that (i) each class bears different
distribution expenses, (ii) each class has exclusive voting rights with respect
to its distribution and service plan (except that the Fund has agreed with the
SEC in connection with the offering of a conversion feature on Class B shares to
submit any amendment of the Class A Plan to both Class A and Class B
shareholders), (iii) each class has a different exchange privilege and (iv) only
Class B shares have a conversion feature. See "How the Fund is
Managed--Distributor." Pursuant to an order of the SEC, the Fund is permitted to
issue and sell multiple classes of common stock. Currently, the Fund is offering
three classes, designated Class A, Class B and Class C shares. In accordance
with the Fund's Articles of Incorporation, the Board of Directors may authorize
the creation of additional series of common stock and classes within such
series, with such preferences, privileges, limitations and voting and dividend
rights as the Board may determine.

The Board of Directors may increase or decrease the number of authorized
shares. Shares of the Fund, when issued, are fully paid, nonassessable, fully
transferable and redeemable at the option of the holder. Shares are also
redeemable at the option of the Fund under certain circumstances as described
under "Shareholder Guide--How to Sell Your Shares." Each share of each class of
common stock is equal as to earnings, assets and voting privileges, except as
noted above, and each class bears the expenses related to the distribution of
its shares. Except for the conversion feature applicable to the Class B shares,
there are no conversion, preemptive or other subscription rights. In the event
of liquidation, each share of common stock of the Fund is entitled to its
portion of all of the Fund's assets after all debts and expenses of the Fund
have been paid. Since Class B and Class C shares generally bear higher
distribution expenses than Class A shares, the liquidation proceeds to
shareholders of those classes are likely to be lower than to Class A
shareholders. The Fund's shares do not have cumulative voting rights for the
election of Directors.

THE FUND DOES NOT INTEND TO HOLD ANNUAL MEETINGS OF SHAREHOLDERS UNLESS
OTHERWISE REQUIRED BY LAW. THE FUND WILL NOT BE REQUIRED TO HOLD MEETINGS OF
SHAREHOLDERS UNLESS, FOR EXAMPLE, THE ELECTION OF DIRECTORS IS REQUIRED TO BE
ACTED ON BY SHAREHOLDERS UNDER THE INVESTMENT COMPANY ACT. SHAREHOLDERS HAVE
CERTAIN RIGHTS, INCLUDING THE RIGHT TO CALL A MEETING UPON A VOTE OF 10% OR MORE
OF THE FUND'S OUTSTANDING SHARES FOR THE PURPOSE OF VOTING ON THE REMOVAL OF ONE
OR MORE DIRECTORS OR TO TRANSACT ANY OTHER BUSINESS.

ADDITIONAL INFORMATION

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

19
<PAGE>
SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND

YOU MAY PURCHASE SHARES OF THE FUND THROUGH PRUDENTIAL SECURITIES, PRUSEC OR
DIRECTLY FROM THE FUND, THROUGH ITS TRANSFER AGENT, PRUDENTIAL MUTUAL FUND
SERVICES, INC. (PMFS OR THE TRANSFER AGENT), ATTENTION: INVESTMENT SERVICES,
P.O. BOX 15020, NEW BRUNSWICK, NEW JERSEY 08966-5020. The minimum initial
investment for Class A and Class B shares is $1,000 per class and $5,000 for
Class C shares. The minimum subsequent investment is $100 for all classes. All
minimum investment requirements are waived for certain retirement and employee
savings plans or custodial accounts for the benefit of minors. For purchases
through the Automatic Savings Accumulation Plan, the minimum initial and
subsequent investment is $50. The minimum initial investment requirement is
waived for purchases of Class A shares effected through an exchange of Class B
shares of The BlackRock Government, Income Trust. See "Shareholder Services"
below.

THE PURCHASE PRICE IS THE NAV NEXT DETERMINED FOLLOWING RECEIPT OF AN ORDER BY
THE TRANSFER AGENT OR PRUDENTIAL SECURITIES PLUS A SALES CHARGE WHICH, AT YOUR
OPTION, MAY BE IMPOSED EITHER (I) AT THE TIME OF PURCHASE (CLASS A SHARES) OR
(II) ON A DEFERRED BASIS (CLASS B OR CLASS C SHARES). SEE "ALTERNATIVE PURCHASE
PLAN" BELOW. SEE ALSO "HOW THE FUND VALUES ITS SHARES."

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

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

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

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

PURCHASE BY WIRE. For an initial purchase of shares of the Fund by wire, you
must first telephone PMFS to receive an account number at (800) 225-1852
(toll-free). The following information will be requested: your name, address,
tax identification number, class election, dividend distribution election,
amount being wired and wiring bank. Instructions should then be given by you to
your bank to transfer funds by wire to State Street Bank and Trust Company
(State Street), Boston, Massachusetts, Custody and Shareholder Services
Division, Attention: Prudential Pacific Growth Fund, Inc., specifying on the
wire the account number assigned by PMFS and your name and identifying the sales
charge alternative (Class A, Class B or Class C shares).

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

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

20
<PAGE>
ALTERNATIVE PURCHASE PLAN

THE FUND OFFERS THREE CLASSES OF SHARES (CLASS A, CLASS B AND CLASS C SHARES)
WHICH ALLOWS YOU TO CHOOSE THE MOST BENEFICIAL SALES CHARGE STRUCTURE FOR YOUR
INDIVIDUAL CIRCUMSTANCES GIVEN THE AMOUNT OF THE PURCHASE, THE LENGTH OF TIME
YOU EXPECT TO HOLD THE SHARES AND OTHER RELEVANT CIRCUMSTANCES (ALTERNATIVE
PURCHASE PLAN).

<TABLE>
<CAPTION>
ANNUAL 12B-1 FEES
(AS A % OF AVERAGE DAILY
SALES CHARGE NET ASSETS) OTHER INFORMATION
------------ ------------------------- -----------------
<S> <C> <C> <C>
CLASS A Maximum initial sales charge of .30 of 1% (Currently Initial sales charge waived or
5% of the public offering price being charged at a rate reduced for certain purchases
of .25 of 1%)
CLASS B Maximum contingent deferred 1% Shares convert to Class A shares
sales charge or CDSC of 5% of approximately seven years after
the lesser of the amount purchase
invested or the redemption
proceeds; declines to zero after
six years
CLASS C Maximum CDSC of 1% of the lesser 1% Shares do not convert to another
of the amount invested or the class
redemption proceeds on
redemptions made within one year
of purchase
</TABLE>

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

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

IN SELECTING A PURCHASE ALTERNATIVE, YOU SHOULD CONSIDER, AMONG OTHER THINGS,
(1) the length of time you expect to hold your investment, (2) the amount of any
applicable sales charge (whether imposed at the time of purchase or redemption)
and distribution-related fees, as noted above, (3) whether you qualify for any
reduction or waiver of any applicable sales charge, (4) the various exchange
privileges among the different classes of shares (see "How to Exchange Your
Shares" below) and (5) the fact that Class B shares automatically convert to
Class A shares approximately seven years after purchase (see "Conversion
Feature--Class B Shares" below).

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

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

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

21
<PAGE>
If you qualify for a reduced sales charge on Class A shares, it may be more
advantageous for you to purchase Class A shares over either Class B or Class C
shares regardless of how long you intend to hold your investment. However,
unlike Class B and Class C shares, you would not have all of your money invested
initially because the sales charge on Class A shares is deducted at the time of
purchase.

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

ALL PURCHASES OF $1 MILLION OR MORE EITHER AS PART OF A SINGLE INVESTMENT OR
UNDER RIGHTS OF ACCUMULATION OR LETTERS OF INTENT, MUST BE FOR CLASS A SHARES.
SEE "REDUCTION AND WAIVER OF INITIAL SALES CHARGES" BELOW.

CLASS A SHARES

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

<TABLE>
<CAPTION>
SALES CHARGE AS SALES CHARGE AS DEALER CONCESSION
PERCENTAGE OF PERCENTAGE OF AS PERCENTAGE OF
AMOUNT OF PURCHASE OFFERING PRICE AMOUNT INVESTED OFFERING PRICE
- ------------------------------------------------- ----------------- ----------------- -----------------
<S> <C> <C> <C>
$0 to $24,999.................................... 5.00% 5.26 4.75%
$25,000 to $49,999............................... 4.50 4.71 4.25
$50,000 to $99,999............................... 4.00 4.17 3.75
$100,000 to $249,000............................. 3.25 3.36 3.00
$250,000 to $499,999............................. 2.50 2.56 2.40
$500,000 to $999,999............................. 2.00 2.04 1.90
$1,000,000 and above............................. None None None
</TABLE>

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

REDUCTION AND WAIVER OF INITIAL SALES CHARGES. Reduced sales charges are
available through Rights of Accumulation and Letters of Intent. Shares of the
Fund and shares of other Prudential Mutual Funds (excluding money market funds
other than those acquired pursuant to the exchange privilege) may be aggregated
to determine the applicable reduction. See "Purchase and Redemption of Fund
Shares--Reduction and Waiver of Initial Sales Charges--Class A Shares" in the
Statement of Additional Information.

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

Special Rules Applicable to Retirement Plans. After a Benefit Plan qualifies
to purchase Class A shares at NAV, all subsequent purchases will be made at NAV.

22
<PAGE>
Other Waivers. In addition, Class A shares may be purchased at NAV, through
Prudential Securities or the Transfer Agent, by the following persons: (a)
Directors and officers of the Fund and other Prudential Mutual Funds, (b)
employees of Prudential Securities and PMF and their subsidiaries and members of
the families of such persons who maintain an "employee related" account at
Prudential Securities or the Transfer Agent, (c) employees and special agents of
Prudential and its subsidiaries and all persons who have retired directly from
active service with Prudential or one of its subsidiaries, (d) registered
representatives and employees of dealers who have entered into a selected dealer
agreement with Prudential Securities provided that purchases at NAV are
permitted by such person's employer and (e) investors who have a business
relationship with a financial adviser who joined Prudential Securities from
another investment firm, provided that (i) the purchase is made within 90 days
of the commencement of the financial adviser's employment at Prudential
Securities, (ii) the purchase is made with proceeds of a redemption of shares of
any open-end, non-money market fund sponsored by the financial adviser's
previous employer (other than a fund which imposes a distribution or service fee
of .25 of 1% or less) on which no deferred sales load, fee or other charge was
imposed on redemption and (iii) the financial adviser served as the client's
broker on the previous purchases.

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

CLASS B AND CLASS C SHARES

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

HOW TO SELL YOUR SHARES

YOU CAN REDEEM SHARES OF THE FUND AT ANY TIME FOR CASH AT THE NAV PER SHARE
NEXT DETERMINED AFTER THE REDEMPTION REQUEST IS RECEIVED IN PROPER FORM BY THE
TRANSFER AGENT OR PRUDENTIAL SECURITIES. See "How the Fund Values its Shares."
In certain cases, however, redemption proceeds will be reduced by the amount of
any applicable contingent deferred sales charge, as described below. See
"Contingent Deferred Sales Charges" below.

IF YOU HOLD SHARES OF THE FUND THROUGH PRUDENTIAL SECURITIES, YOU MUST REDEEM
YOUR SHARES BY CONTACTING YOUR PRUDENTIAL SECURITIES FINANCIAL ADVISER. IF YOU
HOLD SHARES IN NON-CERTIFICATE FORM, A WRITTEN REQUEST FOR REDEMPTION SIGNED BY
YOU EXACTLY AS THE ACCOUNT IS REGISTERED IS REQUIRED. IF YOU HOLD CERTIFICATES,
THE CERTIFICATES, SIGNED IN THE NAME(S) SHOWN ON THE FACE OF THE CERTIFICATES,
MUST BE RECEIVED BY THE TRANSFER AGENT IN ORDER FOR THE REDEMPTION REQUEST TO BE
PROCESSED. IF REDEMPTION IS REQUESTED BY A CORPORATION, PARTNERSHIP, TRUST OR
FIDUCIARY, WRITTEN EVIDENCE OF AUTHORITY ACCEPTABLE TO THE TRANSFER AGENT MUST
BE SUBMITTED BEFORE SUCH REQUEST WILL BE ACCEPTED. All correspondence and
documents concerning redemptions should be sent to the Fund in care of its
Transfer Agent, Prudential Mutual Fund Services, Inc., Attention: Redemption
Services, P.O. Box 15010, New Brunswick, New Jersey 08906-5010.

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

23
<PAGE>
any eligible guarantor institution. For clients of Prusec, a signature guarantee
may be obtained from the agency or office manager of most Prudential Insurance
and Financial Services or Prudential Preferred Financial Services offices.

PAYMENT FOR SHARES PRESENTED FOR REDEMPTION WILL BE MADE BY CHECK WITHIN SEVEN
DAYS AFTER RECEIPT BY THE TRANSFER AGENT OF THE CERTIFICATE AND/OR WRITTEN
REQUEST EXCEPT AS INDICATED BELOW. IF YOU HOLD SHARES THROUGH PRUDENTIAL
SECURITIES, PAYMENT FOR SHARES PRESENTED FOR REDEMPTION WILL BE CREDITED TO YOUR
PRUDENTIAL SECURITIES ACCOUNT, UNLESS YOU INDICATE OTHERWISE. Such payment may
be postponed or the right of redemption suspended at times (a) when the New York
Stock Exchange is closed for other than customary weekends and holidays, (b)
when trading on such Exchange is restricted, (c) when an emergency exists as a
result of which disposal by the Fund of securities owned by it is not reasonably
practicable or it is not reasonably practicable for the Fund fairly to determine
the value of its net assets, or (d) during any other period when the SEC, by
order, so permits; provided that applicable rules and regulations of the SEC
shall govern as to whether the conditions prescribed in (b) (c) or (d) exist.

PAYMENT FOR REDEMPTION OF RECENTLY PURCHASED SHARES WILL BE DELAYED UNTIL THE
FUND OR ITS TRANSFER AGENT HAS BEEN ADVISED THAT THE PURCHASE CHECK HAS BEEN
HONORED, UP TO 10 CALENDAR DAYS FROM THE TIME OF RECEIPT OF THE PURCHASE CHECK
BY THE TRANSFER AGENT. SUCH DELAY MAY BE AVOIDED BY PURCHASING SHARES BY WIRE OR
BY CERTIFIED OR OFFICIAL BANK CHECK.

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

INVOLUNTARY REDEMPTION. In order to reduce expenses of the Fund, the Board of
Directors may redeem all of the shares of any shareholder, other than a
shareholder which is an IRA or other tax-deferred retirement plan, whose account
has a net asset value of less than $500 due to a redemption. The Fund will give
any such shareholder 60 days' prior written notice in which to purchase
sufficient additional shares to avoid such redemption. No contingent deferred
sales charge will be imposed on any involuntary redemption.

30-DAY REPURCHASE PRIVILEGE. If you redeem your shares and have not previously
exercised the repurchase privilege, you may reinvest any portion or all of the
proceeds of such redemption in shares of the Fund at the NAV next determined
after the order is received, which must be within 30 days after the date of
redemption. No sales charge will apply to such repurchases. You will receive pro
rata credit for any contingent deferred sales charge paid in connection with the
redemption of Class B or Class C shares. You must notify the Fund's Transfer
Agent, either directly or through Prudential Securities or Prusec, at the time
the repurchase privilege is exercised that you are entitled to credit for the
contingent deferred sales charge previously paid. Exercise of the repurchase
privilege will not affect federal income tax treatment of any gain realized upon
redemption. If the redemption resulted in a loss, some or all of the loss,
depending on the amount reinvested, will not be allowed for federal income tax
purposes.

CONTINGENT DEFERRED SALES CHARGES

Redemptions of Class B shares will be subject to a contingent deferred sales
charge or CDSC declining from 5% to zero over a six-year period. Class C shares
redeemed within one year of purchase will be subject to a 1% CDSC. The CDSC will
be deducted from the redemption proceeds and reduce the amount paid to you. The
CDSC will be imposed on any

24
<PAGE>
redemption by you which reduces the current value of your Class B or Class C
shares to an amount which is lower than the amount of all payments by you for
shares during the preceding six years, in the case of Class B shares, and one
year, in the case of Class C shares. A CDSC will be applied on the lesser of the
original purchase price or the current value of the shares being redeemed.
Increases in the value of your shares or shares acquired through reinvestment of
dividends or distributions are not subject to a CDSC. The amount of any
contingent deferred sales charge will be paid to and retained by the
Distributor. See "How the Fund is Managed--Distributor" and "Waiver of the
Contingent Deferred Sales Charges--Class B Shares."

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

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

CHARGE AS A PERCENTAGE
YEAR SINCE PURCHASE OF DOLLARS INVESTED OR
PAYMENT MADE REDEMPTION PROCEEDS
- ------------------------------------------------- -------------------------

First............................................ 5.0%
Second........................................... 4.0%
Third............................................ 3.0%
Fourth........................................... 2.0%
Fifth............................................ 1.0%
Sixth............................................ 1.0%
Seventh.......................................... None

In determining whether a CDSC is applicable to a redemption, the calculation
will be made in a manner that results in the lowest possible rate. It will be
assumed that the redemption is made first of amounts representing shares
acquired pursuant to the reinvestment of dividends and distributions; then of
amounts representing the increase in net asset value above the total amount of
payments for the purchase of Fund shares made during the preceding six years
(five years for Class B shares purchased prior to January 22, 1990); then of
amounts representing the cost of shares held beyond the applicable CDSC period;
then of amounts representing shares acquired prior to July 1, 1985, and
finally, of amounts representing the cost of shares held for the longest period
of time within the applicable CDSC period.

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

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

25
<PAGE>
WAIVER OF THE CONTINGENT DEFERRED SALES CHARGES--CLASS B SHARES. The CDSC
will be waived in the case of a redemption following the death or disability
of a shareholder or, in the case of a trust account, following the death or
disability of the grantor. The waiver is available for total or partial
redemptions of shares owned by a person, either individually or in joint
tenancy (with rights of survivorship), or a trust, at the time of death or
initial determination of disability, provided that the shares were purchased
prior to death or disability.

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

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

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

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

CONVERSION FEATURE--CLASS B SHARES

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

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

26
<PAGE>
For purposes of determining the number of Eligible Shares, if the Class B
shares in your account on any conversion date are the result of multiple
purchases at different net asset values per share, the number of Eligible Shares
calculated as described above will generally be either more or less than the
number of shares actually purchased approximately seven years before such
conversion date. For example, if 100 shares were initially purchased at $10 per
share (for a total of $1,000) and a second purchase of 100 shares was
subsequently made at $11 per share (for a total of $1,100), 95.24 shares would
convert approximately seven years from the initial purchase (i.e., $1,000
divided by $2,100 (47.62%) multiplied by 200 shares equals 95.24 shares). The
Manager reserves the right to modify the formula for determining the number of
Eligible Shares in the future as it deems appropriate on notice to shareholders.

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

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

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

HOW TO EXCHANGE YOUR SHARES

AS A SHAREHOLDER OF THE FUND YOU HAVE AN EXCHANGE PRIVILEGE WITH CERTAIN OTHER
PRUDENTIAL MUTUAL FUNDS, INCLUDING ONE OR MORE SPECIFIED MONEY MARKET FUNDS,
SUBJECT TO THE MINIMUM INVESTMENT REQUIREMENTS OF SUCH FUNDS. CLASS A, CLASS B
AND CLASS C SHARES MAY BE EXCHANGED FOR CLASS A, CLASS B AND CLASS C SHARES,
RESPECTIVELY, OF ANOTHER FUND ON THE BASIS OF THE RELATIVE NAV. No sales charge
will be imposed at the time of the exchange. Any applicable CDSC payable upon
the redemption of shares exchanged will be that imposed by the fund in which
shares are initially purchased and will be calculated from the first day of the
month after the initial purchase, excluding the time shares were held in a money
market fund. Class B and Class C shares may not be exchanged into money market
funds other than Prudential Special Money Market Fund. For purposes of
calculating the holding period applicable to the Class B conversion feature, the
time period during which Class B shares were held in a money market fund will be
excluded. See "Conversion

27
<PAGE>
Feature--Class B Shares" above. An exchange will be treated as a redemption and
purchase for tax purposes. See "Shareholder Investment Account--Exchange
Privilege" in the Statement of Additional Information.

IN ORDER TO EXCHANGE SHARES BY TELEPHONE, YOU MUST AUTHORIZE TELEPHONE
EXCHANGES ON YOUR INITIAL APPLICATION FORM OR BY WRITTEN NOTICE TO THE TRANSFER
AGENT AND HOLD SHARES IN NON-CERTIFICATE FORM. Thereafter, you may call the Fund
at (800) 225-1852 to execute a telephone exchange of shares, on weekdays, except
holidays, between the hours of 8:00 A.M. and 6:00 P.M., New York time. For your
protection and to prevent fraudulent exchanges, your telephone call will be
recorded and you will be asked to provide your personal identification number. A
written confirmation of the exchange transaction will be sent to you. NEITHER
THE FUND NOR ITS AGENTS WILL BE LIABLE FOR ANY LOSS, LIABILITY OR COST WHICH
RESULTS FROM ACTING UPON INSTRUCTIONS REASONABLY BELIEVED TO BE GENUINE UNDER
THE FOREGOING PROCEDURES. ALL EXCHANGES WILL BE MADE ON THE BASIS OF THE
RELATIVE NAV OF THE TWO FUNDS NEXT DETERMINED AFTER THE REQUEST IS RECEIVED IN
GOOD ORDER. THE EXCHANGE PRIVILEGE IS AVAILABLE ONLY IN STATES WHERE THE
EXCHANGE MAY LEGALLY BE MADE.

IF YOU HOLD SHARES THROUGH PRUDENTIAL SECURITIES, YOU MUST EXCHANGE YOUR
SHARES BY CONTACTING YOUR PRUDENTIAL SECURITIES FINANCIAL ADVISER.

IF YOU HOLD CERTIFICATES, THE CERTIFICATES, SIGNED IN THE NAME(S) SHOWN ON THE
FACE OF THE CERTIFICATES, MUST BE RETURNED IN ORDER FOR THE SHARES TO BE
EXCHANGED. SEE "HOW TO SELL YOUR SHARES" ABOVE.

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

IN PERIODS OF SEVERE MARKET OR ECONOMIC CONDITIONS THE TELEPHONE EXCHANGE OF
SHARES MAY BE DIFFICULT TO IMPLEMENT AND YOU SHOULD MAKE EXCHANGES BY MAIL BY
WRITING TO PRUDENTIAL MUTUAL FUND SERVICES, INC., AT THE ADDRESS NOTED ABOVE.

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

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

SHAREHOLDER SERVICES

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

. AUTOMATIC REINVESTMENT OF DIVIDENDS AND/OR DISTRIBUTIONS WITHOUT A SALES
CHARGE. For your convenience, all dividends and distributions are automatically
reinvested in full and fractional shares of the Fund at NAV without a sales
charge. You may direct the Transfer Agent in writing not less than 5 full
business days prior to the record date to have subsequent

28
<PAGE>
dividends and/or distributions sent in cash rather than reinvested. If you hold
shares through Prudential Securities, you should contact your financial adviser.

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

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

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

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

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

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

29
<PAGE>
THE PRUDENTIAL MUTUAL FUND FAMILY

Prudential Mutual Fund Management offers a broad range of mutual funds
designed to meet your individual needs. We welcome you to review the investment
options available through our family of funds. For more information on the
Prudential Mutual Funds, including charges and expenses, contact your Prudential
Securities financial adviser or Prusec representative or telephone the Funds at
(800) 225-1852 for a free prospectus. Read the prospectus carefully before you
invest or send money.
<TABLE>
<S> <C>
Global Assets Portfolio
TAXABLE BOND FUNDS Short-Term Global Income Portfolio
Prudential Adjustable Rate Securities Fund, Inc. Global Utility Fund, Inc.
Prudential GNMA Fund, Inc.
Prudential Government Income Fund, Inc. EQUITY FUNDS
Prudential Government Securities Trust Prudential Allocation Fund
Intermediate Term Series Conservatively Managed Portfolio
Prudential High Yield Fund,Inc. Strategy Portfolio
Prudential Structured Maturity Fund,Inc. Prudential Equity Fund, Inc.
Income Portfolio Prudential Equity Income Fund
Prudential U.S. Government Fund Prudential Growth Opportunity Fund, Inc.
The BlackRock Government Income Trust Prudential IncomeVertible(R) Fund, Inc.
Prudential Multi-Sector Fund, Inc.
TAX-EXEMPT BOND FUNDS Prudential Strategist Fund, Inc.
Prudential Utility Fund, Inc.
Prudential California Municipal Fund Nicholas-Applegate Fund, Inc.
California Series Nicholas-Applegate Growth Equity Fund
California Income Series
Prudential Municipal Bond Fund MONEY MARKET FUNDS
High Yield Series
Insured Series . Taxable Money Market Funds
Modified Term Series Prudential Government Securities Trust
Prudential Municipal Series Fund Money Market Series
Arizona Series U.S. Treasury Money Market Series
Florida Series Prudential Special Money Market Fund
Georgia Series Money Market Series
Hawaii Income Series Prudential MoneyMart Assets
Maryland Series Tax-Free Money Market Funds
Massachusetts Series Prudential Tax-Free Money Fund .
Prudential California Municipal Fund
Minnesota Series California Money Market Series
New Jersey Series Prudential Municipal Series Fund
New York Series Connecticut Money Market Series
North Carolina Series Massachusetts Money Market Series
Ohio Series New Jersey Money Market Series
Pennsylvania Series New York Money Market Series
Prudential National Municipals Fund, Inc. . Command Funds
Command Money Fund
GLOBAL FUNDS Command Government Fund
Command Tax-Free Fund
Prudential Europe Growth Fund, Inc. . Institutional Money Market Funds
Prudential Global Fund, Inc. Prudential Institutional Liquidity Portfolio, Inc.
Prudential Global Genesis Fund, Inc. Institutional Money Market
Prudential Global Natural Resources Fund, Inc.Series
Prudential Intermediate Global Income Fund, Inc.
Prudential Pacific Growth Fund, Inc.
Prudential Short-Term Global Income Fund, Inc.
A-1
</TABLE>

<PAGE>
NO DEALER, SALES REPRESENTATIVE OR ANY
OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS, OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS, IN
CONNECTION WITH THE OFFER CONTAINED
HEREIN, AND, IF GIVEN OR MADE, SUCH
OTHER INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE FUND OR THE Prudential
DISTRIBUTOR. THIS PROSPECTUS DOES NOT Pacific Growth
CONSTITUTE AN OFFER BY THE FUND OR BY Fund, Inc.
THE DISTRIBUTOR TO SELL, OR A SOLICITATION ===================
OF ANY OFFER TO BUY ANY OF THE SECURITIES
OFFERED HEREBY IN ANY JURISDICTION TO ANY
PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER IN SUCH JURISDICTION.
==============================================

TABLE OF CONTENTS
PAGE
----

FUND EXPENSES......................... 2
FINANCIAL HIGHLIGHTS.................. 4
HOW THE FUND INVESTS.................. 6
Investment Objective and Policies.... 6
Risks and Special Considerations of
Investing in Foreign Securities....... 7
Hedging and Income Enhancement
Strategies............................ 8
Other Investments and Policies....... 11
Investment Restrictions.............. 12
HOW THE FUND IS MANAGED............... 13
Manager.............................. 13
Distributor.......................... 13
Fee Waivers and Subsidy.............. 16
Portfolio Transactions............... 16
Custodian and Transfer and Dividend
Disbursing Agent...................... 16
HOW THE FUND VALUES ITS SHARES........ 16
HOW THE FUND CALCULATES PERFORMANCE... 16
TAXES, DIVIDENDS AND DISTRIBUTIONS.... 17
GENERAL INFORMATION................... 19
Description of Common Stock.......... 19
Additional Information............... 19
SHAREHOLDER GUIDE..................... 20
How to Buy Shares of the Fund........ 20
Alternative Purchase Plan............ 21
How to Sell Your Shares.............. 23
Conversion Feature--Class B Shares... 26
How to Exchange Your Shares.......... 27
Shareholder Services................. 28
THE PRUDENTIAL MUTUAL FUND FAMILY..... A-1

============================================== PROSPECTUS
MF 157A 4445680 JANUARY 3, 1995

CUSIP NOS.: CLASS A: 743941 10 6 PRUDENTIAL MUTUAL FUNDS
CLASS B: 743941 20 5 BUILDING YOUR FUTURE
CLASS C: 743941 30 4 ON OUR STRENGTH
[LOGO]

<PAGE>

PRUDENTIAL MUTUAL FUNDS
Supplement dated May 5, 1995

The following information supplements the Prospectus of
each of the Funds listed below.

SHAREHOLDER GUIDE

ALTERNATIVE PURCHASE PLAN

Class A Shares--Reduction and Waiver of Initial Sales Charges

Other Waivers. Class A shares may be purchased at NAV, through
Prudential Securities or the Transfer Agent, by investors who have a
business relationship with a financial adviser who joined Prudential
Securities from another investment firm, provided that (i) the purchase is
made within 90 days of the commencement of the financial adviser's
employment at Prudential Securities, (ii) the purchase is made with
proceeds of a redemption of shares of any open-end, non-money market fund
sponsored by the financial adviser's previous employer (other than a fund
which imposes a distribution or service fee .25 of 1% or less) and (iii)
the financial adviser served as the client's broker on the previous
purchase.

HOW TO SELL YOUR SHARES

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

<PAGE>

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

Name of Fund Prospectus Date
------------ ---------------
Prudential Adjustable Rate Securities Fund, Inc. May 1, 1994
Prudential Allocation Fund September 29, 1994
Prudential California Municipal Fund
California Income Series December 30, 1994
California Series December 30, 1994
Prudential Equity Income Fund December 30, 1994
Prudential Global Fund, Inc. January 3, 1995
Prudential Global Genesis Fund, Inc. August 1, 1994
Prudential Global Natural Resources Fund, Inc. August 1, 1994
Prudential Multi-Sector Fund, Inc. August 1, 1994
Prudential Municipal Bond Fund August 1, 1994
Prudential Municipal Series Fund
Arizona Series December 30, 1994
Florida Series December 30, 1994
Georgia Series December 30, 1994
Maryland Series December 30, 1994
Massachusetts Series December 30, 1994
Michigan Series December 30, 1994
Minnesota Series December 30, 1994
New Jersey Series December 30, 1994
New York Series December 30, 1994
North Carolina Series December 30, 1994
Ohio Series December 30, 1994
Pennsylvania Series December 30, 1994
Prudential Pacific Growth Fund, Inc. January 3, 1995
Prudential Short-Term Global Income Fund, Inc.
Global Assets Portfolio January 3, 1995
Short-Term Global Income Fund January 3, 1995
Prudential Strategist Fund, Inc. August 1, 1994
Prudential U.S. Government Fund January 3, 1995
The BlackRock Government Income Trust November 1, 1994
(as supplemented
December 30, 1994)

<PAGE>

PRUDENTIAL MUTUAL FUNDS
Supplement dated July 3, 1995

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

SHAREHOLDER GUIDE

HOW TO BUY SHARES OF THE FUND

Reduction and Waiver of Initial Sales Charges.

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

<PAGE>

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

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

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.

Statement of Additional Information
dated January 3, 1995

Prudential Pacific Growth Fund, Inc. (the Fund) is an open-end, diversified
management investment company whose investment objective is long-term growth of
capital. The Fund seeks to achieve this objective by investing primarily in
common stocks, common stock equivalents (including warrants and convertible debt
securities) and other equity securities of companies doing business in or
domiciled in the Pacific Basin region. Under normal circumstances, the Fund
intends to invest at least 65% of its total assets in such securities. The Fund
may invest in equity securities of other companies and in non-convertible debt
securities and options on stocks, stock indices, foreign currencies and futures
contracts on foreign currencies and on financial or stock indices and may
purchase and sell futures contracts on foreign currencies and groups of
currencies so as to hedge its portfolio and to attempt to enhance income. There
can be no assurance that the Fund's investment objective will be achieved. See
"Investment Objective and Policies."

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

This Statement of Additional Information is not a prospectus and should be
read in conjunction with the Fund's Prospectus dated January 3, 1995, a copy of
which may be obtained from the Fund upon request.

TABLE OF CONTENTS

<TABLE><CAPTION>
CROSS-REFERENCE
TO PAGE IN
PAGE PROSPECTUS
---- ---------------
<S> <C> <C>
Investment Objective and Policies......................................... B-2 6
Investment Restrictions................................................... B-12 12
Directors and Officers.................................................... B-14 13
Manager................................................................... B-17 13
Distributor............................................................... B-19 13
Portfolio Transactions and Brokerage...................................... B-22 16
Purchase and Redemption of Fund Shares.................................... B-23 20
Shareholder Investment Account............................................ B-26 28
Net Asset Value........................................................... B-30 16
Taxes..................................................................... B-30 17
Performance Information................................................... B-34 16
Custodian, Transfer and Dividend Disbursing Agent and Independent
Accountants............................................................... B-36 16
Description of Security Ratings........................................... B-36 --
Financial Statements...................................................... B-38 --
Independent Auditor's Report.............................................. B-50 --
</TABLE>

- --------------------------------------------------------------------------------
MF 157 B

<PAGE>
INVESTMENT OBJECTIVE AND POLICIES

The Fund's investment objective is long-term growth of capital. It seeks to
achieve this objective by investing primarily in common stocks, common stock
equivalents (including warrants and convertible debt securities) and other
equity securities of companies doing business in or domiciled in the Pacific
Basin region, including but not limited to, Japan, Australia, Hong Kong,
Singapore, South Korea, Malaysia, Thailand, Indonesia, The Philippines and New
Zealand. There can be no assurance that the Fund's investment objective will be
achieved. See "How the Fund Invests--Investment Objective and Policies" in the
Prospectus.

OPTIONS ON SECURITIES

The Fund may purchase and write (i.e., sell) put and call options on
securities that are traded on U.S. or foreign securities exchanges or that are
traded in the over-the-counter markets. A call option is a short-term contract
pursuant to which the purchaser, in return for a premium paid, has the right to
buy the security underlying the option at a specified exercise price at any time
during the term of the option. The writer of the call option, who receives the
premium, has the obligation, upon exercise of the option, to deliver the
underlying security against payment of the exercise price. A put option is a
similar contract which gives the purchaser, in return for a premium, the right
to sell the underlying security at a specified price during the term of the
option. The writer of the put, who receives the premium, has the obligation to
buy the underlying security upon exercise at the exercise price. The Fund will
write put options only when the investment adviser desires to invest in the
underlying security. The premium paid by the purchaser of an option will
reflect, among other things, the relationship of the exercise price to the
market price and volatility of the underlying security, the remaining term of
the option, supply and demand and interest rates.

A call option written by the Fund is "covered" if the Fund owns the security
underlying the option or has an absolute and immediate right to acquire that
security without additional cash consideration (or for additional cash
consideration held in a segregated account by its Custodian) upon conversion or
exchange of other securities held in its portfolio. A call option is also
covered if the Fund holds on a share-for-share basis a call on the same security
as the call written where the exercise price of the call held is equal to or
less than the exercise price of the call written or greater than the exercise
price of the call written if the difference is maintained by the Fund in cash,
U.S. Government securities or other liquid high-grade debt obligations in a
segregated account with its Custodian. A put option written by the Fund is
"covered" if the Fund maintains cash, U.S. Government securities or other liquid
high-grade debt obligations with a value equal to the exercise price in a
segregated account with its Custodian, or else holds on a share-for-share basis
a put of the same security as the put written where the exercise price of the
put held is equal to or greater than the exercise price of the put written.

If the writer of an option wishes to terminate the obligation, he or she may
effect a "closing purchase transaction." This is accomplished by buying an
option of the same series as the option previously written. The effect of the
purchase is that the writer's position will be cancelled by the clearing
corporation. However, a writer may not effect a closing purchase transaction
after he or she had been notified of the exercise of an option. Similarly, an
investor who is the holder of an option may liquidate his or her position by
effecting a "closing sale transaction." This is accomplished by selling an
option of the same series as the option previously purchased. There is no
guarantee that either a closing purchase or a closing sale transaction can be
effected. To secure the obligation to deliver the underlying security in the
case of a call option, the writer of the option is generally required to pledge
for the benefit of the broker the underlying security or other assets in
accordance with the rules of the relevant exchange or clearinghouse, such as The
Options Clearing Corporation (OCC), an institution created to interpose itself
between buyers and sellers of options in the United States. Technically, the
clearinghouse assumes the other side of every purchase and sale transaction on
an exchange and, by doing so, guarantees the transaction.

B-2
<PAGE>
The Fund will realize a profit from a closing transaction if the price of the
transaction is less than the premium received from writing the option or is more
than the premium paid to purchase the option; the Fund will realize a loss from
a closing transaction if the price of the transaction is more than the premium
received from writing the option or is less than the premium paid to purchase
the option. Because increases in the market price of a call option will
generally reflect increases in the market price of the underlying security, any
loss resulting from the repurchase of a call option may be offset in whole or in
part if the Fund holds the underlying security by appreciation of the underlying
security owned by the Fund.

The Fund may also purchase a "protective put," i.e., a put option acquired for
the purpose of protecting a portfolio security from a decline in market value.
In exchange for the premium paid for the put option, the Fund acquires the right
to sell the underlying security at the exercise price of the put regardless of
the extent to which the underlying security declines in value. The loss to the
Fund is limited to the premium paid for, and transaction costs in connection
with, the put plus the initial excess, if any, of the market price of the
underlying security over the exercise price. However, if the market price of the
security underlying the put rises, the profit the Fund realizes on the sale of
the security will be reduced by the premium paid for the put option less any
amount (net of transaction costs) for which the put may be sold. Similar
principles apply to the purchase of puts on stock indices, as described below.

OPTIONS ON SECURITIES INDICES. In addition to options on securities, the Fund
may also purchase and sell put and call options on securities indices traded on
U.S. or foreign securities exchanges or traded in the over-the-counter markets.
Options on securities indices are similar to options on securities except that,
rather than the right to take or make delivery of a security at a specified
price, an option on a securities index gives the holder the right to receive,
upon exercise of the option, an amount of cash if the closing level of the
securities index upon which the option is based is greater than, in the case of
a call, or less than, in the case of a put, the exercise price of the option.
This amount of cash is equal to such difference between the closing price of the
index and the exercise price of the option expressed in dollars times a
specified multiple (the multiplier). The writer of the option is obligated, in
return for the premium received, to make delivery of this amount. Unlike for
equity securities options, all settlements are in cash, and gain or loss depends
on price movements in the securities market generally (or in a particular
industry or segment of the market) rather than price movements in individual
securities.

The multiplier for an index option performs a function similar to the unit of
trading for a stock option. It determines the total dollar value per contract of
each point in the difference between the exercise price of an option and the
current level of the underlying index. A multiplier of 100 means that a
one-point difference will yield $100. Options on different indices may have
different multipliers. Because exercises of index options are settled in cash, a
call writer cannot determine the amount of its settlement obligations in advance
and, unlike call writing on specific stocks, cannot provide in advance for, or
cover, its potential settlement obligations by acquiring and holding the
underlying securities. In addition, unless the Fund has other liquid assets
which are sufficient to satisfy the exercise of a call, the Fund would be
required to liquidate portfolio securities or borrow in order to satisfy the
exercise.

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

RISKS OF TRANSACTIONS IN OPTIONS

An option position may be closed out only on an exchange, board of trade or
other trading facility which provides a secondary market for an option of the
same series. Although the Fund will generally purchase or write only those
options for

B-3
<PAGE>
which there appears to be an active secondary market, there is no assurance that
a liquid secondary market on an exchange will exist for any particular option,
or at any particular time, and for some options no secondary market on an
exchange or otherwise may exist. In such event it might not be possible to
effect closing transactions in particular options, with the result that the Fund
would have to exercise its options in order to realize any profit and would
incur brokerage commissions upon the exercise of call options and upon the
subsequent disposition of underlying securities acquired through the exercise of
call options or upon the purchase of underlying securities for the exercise of
put options. If the Fund as a covered call option writer is unable to effect a
closing purchase transaction in a secondary market, it will not be able to sell
the underlying security until the option expires or it delivers the underlying
security upon exercise.

Reasons for the absence of a liquid secondary market on an exchange include
the following: (i) there may be insufficient trading interest in certain
options; (ii) restrictions may be imposed by an exchange on opening transactions
or closing transactions or both; (iii) trading halts, suspensions or other
restrictions may be imposed with respect to particular classes or series of
options or underlying securities; (iv) unusual or unforeseen circumstances may
interrupt normal operations on an exchange; (v) the facilities of an exchange or
a clearing corporation may not at all times be adequate to handle current
trading volume; or (vi) one or more exchanges could, for economic or other
reasons, decide or be compelled at some future date to discontinue the trading
of options (or a particular class or series of options), in which event the
secondary market on that exchange (or in the class or series of options) would
cease to exist, although outstanding options on that exchange that had been
issued by a clearing corporation as a result of trades on that exchange would
continue to be exercisable in accordance with their terms. There is no assurance
that higher than anticipated trading activity or other unforeseen events might
not, at times, render certain of the facilities of any of the clearing
corporations inadequate, and thereby result in the institution by an exchange of
special procedures which may interfere with the timely execution of customers'
orders. The Fund intends to purchase and sell only those options which are
cleared by clearinghouses whose facilities are considered to be adequate to
handle the volume of options transactions.

RISKS OF OPTIONS ON INDICES

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

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

The ability to establish and close out positions on such options will be
subject to the development and maintenance of a liquid secondary market. It is
not certain that this market will develop in all index option contracts. The
Fund will not purchase or sell any index option contract unless and until, in
the investment adviser's opinion, the market for such options has developed
sufficiently that the risk in connection with such transactions is not
substantially greater than the risk in connection with options on securities in
the index.

SPECIAL RISKS OF WRITING CALLS ON INDICES

Because exercises of index options are settled in cash, a call writer such as
the Fund cannot determine the amount of its settlement obligations in advance
and, unlike call writing on specific stocks, cannot provide in advance for, or
cover, its potential settlement obligations by acquiring and holding the
underlying securities. However, the Fund will write call options on

B-4
<PAGE>
indices only under the circumstances described below under "Limitations on
Purchase and Sale of Stock Options and Options on Stock Indices, Foreign
Currencies and Futures Contracts on Foreign Currencies."

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

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

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

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

RISKS OF OPTIONS ON FOREIGN CURRENCIES

Options on foreign currencies involve the currencies of two nations and
therefore, developments in either or both countries affect the values of options
on foreign currencies. Risks include those described in the Prospectus under
"How the Fund Invests--Special Considerations and Risks of Investing in Foreign
Securities," including government actions affecting currency valuation and the
movements of currencies from one country to another. The quantity of currency
underlying option contracts represent odd lots in a market dominated by
transactions between banks; this can mean extra transaction costs upon exercise.
Option markets may be closed while round-the-clock interbank currency markets
are open, and this can create price and rate discrepancies.

B-5
<PAGE>
RISKS RELATED TO FORWARD CURRENCY EXCHANGE CONTRACTS

The Fund may enter into forward foreign currency exchange contracts in several
circumstances. When the Fund enters into a contract for the purchase or sale of
a security denominated in a foreign currency, or when the Fund anticipates the
receipt in a foreign currency of dividends or interest payments on a security
which it holds, the Fund may desire to "lock-in" the U.S. dollar price of the
security or the U.S. dollar equivalent of such dividend or interest payment, as
the case may be. By entering into a forward contract for a fixed amount of
dollars, for the purchase or sale of the amount of foreign currency involved in
the underlying transactions, the Fund may be able to protect itself against a
possible loss resulting from an adverse change in the relationship between the
U.S. dollar and the foreign currency during the period between the date on which
the security is purchased or sold, or on which the dividend or interest payment
is declared, and the date on which such payments are made or received.

Additionally, when the investment adviser believes that the currency of a
particular foreign country may suffer a substantial decline against the U.S.
dollar, the Fund may enter into a forward contract for a fixed amount of
dollars, to sell the amount of foreign currency approximating the value of some
or all of the Fund's portfolio securities denominated in such foreign currency.
The precise matching of the forward contract amounts and the value of the
securities involved will not generally be possible since the future value of
securities in foreign currencies will change as a consequence of market
movements in the value of those securities between the date on which the forward
contract is entered into and the date it matures. The projection of short-term
currency market movement is extremely difficult, and the successful execution of
a short-term hedging strategy is highly uncertain. The Fund does not intend to
enter into such forward contracts to protect the value of its portfolio
securities on a regular or continuous basis. The Fund does not intend to enter
into such forward contracts or maintain a net exposure to such contracts where
the consummation of the contracts would obligate the Fund to deliver an amount
of foreign currency in excess of the value of the Fund's portfolio securities or
other assets denominated in that currency. However, the Fund believes that it is
important to have the flexibility to enter into such forward contracts when it
determines that the best interests of the Fund will thereby be served. The
Fund's Custodian will place cash or liquid securities into a segregated account
of the Fund in an amount equal to the value of the Fund's total assets committed
to the consummation of forward foreign currency exchange contracts. If the value
of the securities placed in the segregated account declines, additional cash or
securities will be placed in the account on a daily basis so that the value of
the account will equal the amount of the Fund's commitments with respect to such
contracts.

The Fund generally will not enter into a forward contract with a term of
greater than one year. At the maturity of a forward contract, the Fund may
either sell the portfolio security and make delivery of the foreign currency, or
it may retain the security and terminate its contractual obligation to deliver
the foreign currency by purchasing an "offsetting" contract with the same
currency trader obligating it to purchase, on the same maturity date, the same
amount of the foreign currency.

It is impossible to forecast with absolute precision the market value of a
particular portfolio security at the expiration of the forward contract.
Accordingly, if a decision is made to sell the security and make delivery of the
foreign currency and if the market value of the security is less than the amount
of foreign currency that the Fund is obligated to deliver, then it would be
necessary for the Fund to purchase additional foreign currency on the spot
market (and bear the expense of such purchase).

If the Fund retains the portfolio security and engages in an offsetting
transaction, the Fund will incur a gain or a loss to the extent that there has
been movement in forward contract prices. Should forward contract prices decline
during the period between the Fund's entering into a forward contract for the
sale of a foreign currency and the date it enters into an offsetting contract
for the purchase of the foreign currency, the Fund will realize a gain to the
extent that the price of the currency it has agreed to sell exceeds the price of
the currency it has agreed to purchase. Should forward contract prices increase,
the Fund will suffer a loss to the extent that the price of the currency it has
agreed to purchase exceeds the price of the currency it has agreed to sell.

B-6
<PAGE>
The Fund's dealing in forward foreign currency exchange contracts will
generally be limited to the transactions described above. Of course, the Fund is
not required to enter into such transactions with regard to its foreign
currency-dominated securities. It also should be recognized that this method of
protecting the value of the Fund's portfolio securities against a decline in the
value of a currency does not eliminate fluctuations in the underlying prices of
the securities which are unrelated to exchange rates. Additionally, although
such contracts tend to minimize the risk of loss due to a decline in the value
of the hedged currency, at the same time they tend to limit any potential gain
which might result should the value of such currency increase.

Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend physically to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. It will do so from time to time, and investors should
be aware of the costs of currency conversion. Although foreign exchange dealers
do not charge a fee for conversion, they do realize a profit based on the
difference (the spread) between the prices at which they are buying and selling
various currencies. Thus, a dealer may offer to sell a foreign currency to the
Fund at one rate, while offering a lesser rate of exchange should the Fund
desire to resell that currency to the dealer.

RISKS OF TRANSACTIONS IN FUTURES CONTRACTS

There are several risks in connection with the use of futures contracts as a
hedging device. Due to the imperfect correlation between the price of futures
contracts and movements in the currency or group of currencies, the price of a
futures contract may move more or less than the price of the currencies being
hedged. In the case of futures contracts on securities indices, the correlation
between the price of the futures contract and the movements in the index may not
be perfect. Therefore, a correct forecast of currency rates, market trends or
international political trends by the investment adviser may still not result in
a successful hedging transaction.

Although the Fund will purchase or sell futures contracts only on exchanges
where there appears to be an adequate secondary market, there is no assurance
that a liquid secondary market on an exchange will exist for any particular
contract or at any particular time. Accordingly, there can be no assurance that
it will be possible, at any particular time, to close a futures position. In the
event the Fund could not close a futures position and the value of such position
declined, the Fund would be required to continue to make daily cash payments of
variation margin. There is no guarantee that the price movements of the
portfolio securities denominated in foreign currencies will, in fact, correlate
with the price movements in the futures contract and thus provide an offset to
losses on a futures contract. Currently, currency futures contracts are
available on various foreign currencies including the Australian Dollar, British
Pound, Canadian Dollar, Japanese Yen, Swiss Franc, West German Mark and
Eurodollars. Index futures contracts are available on various U.S. and foreign
securities indices.

Under regulations of the Commodity Exchange Act, investment companies
registered under the Investment Company Act of 1940, as amended (the Investment
Company Act), are exempt from the definition of "commodity pool operator,"
subject to compliance with certain conditions. The exemption is conditioned upon
a requirement that all of the Fund's futures or options transactions constitute
bona fide hedging transactions within the meaning of the regulations of the
Commodity Futures Trading Commission (CFTC). The Fund will use currency futures
and options on futures or commodity options contracts in a manner consistent
with this requirement. The Fund may also enter into futures or related options
contracts for income enhancement and risk management purposes if the aggregate
initial margin and option premiums do not exceed 5% of the liquidation value of
the Fund's total assets, after taking into account unrealized profits and
unrealized losses on any such contracts, provided, however, that in the case of
an option that is in-the-money, the in-the-money amount may be excluded in
computing such 5%. The above restriction does not apply to the purchase and sale
of futures and related options contracts for bona fide hedging purchases.

B-7
<PAGE>
Successful use of futures contracts by the Fund is also subject to the ability
of the Fund's investment adviser to predict correctly movements in the direction
of markets and other factors affecting currencies or the securities market
generally. For example, if the Fund had hedged against the possibility of an
increase in currency rates which would adversely affect the price of securities
in its portfolio and the price of such securities increases instead, the Fund
will lose part or all of the benefit of the increased value of its securities
because it will have offsetting losses in its futures positions. In addition, in
such situations, if the Fund has insufficient cash to meet daily variation
margin requirements, it may need to sell securities to meet such requirements.
Such sales of securities may be, but will not necessarily be, at increased
prices which reflect the rising market. The Fund may have to sell securities at
a time when it is disadvantageous to do so.

The hours of trading of futures contracts may not conform to the hours during
which the Fund may trade the underlying securities. To the extent that the
futures markets close before the securities markets, significant price and rate
movements can take place in the securities markets that cannot be reflected in
the futures markets.

OPTIONS ON FUTURES CONTRACTS

An option on a futures contract gives the purchaser the right, but not the
obligation, to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option exercise period. The writer of the
option is required upon exercise to assume an offsetting futures position (a
short position if the option is a call and a long position if the option is a
put). Upon exercise of the option, the assumption of offsetting futures
positions by the writer and holder of the option will be accompanied by delivery
of the accumulated cash balance in the writer's futures margin account which
represents the amount by which the market price of the futures contract, at
exercise, exceeds, in the case of a call, or is less than, in the case of a put,
the exercise price of the option on the futures contract. Currently options can
be purchased or written with respect to futures contracts on various foreign
currencies, including the Australian Dollar, British Pound, Canadian Dollar,
Japanese Yen, Swiss Franc, West German Mark and Eurodollars. With respect to
stock indices, options are traded on futures contracts for various U.S. and
foreign stock indicies including the S&P 500 Stock Index and the NYSE Composite
Index.

The holder or writer of an option may terminate its position by selling or
purchasing an option of the same series. There is no guarantee that such closing
transactions can be effected.

LIMITATIONS ON PURCHASE AND SALE OF STOCK OPTIONS AND OPTIONS ON STOCK INDICES,
FOREIGN CURRENCIES AND FUTURES CONTRACTS ON FOREIGN CURRENCIES

The Fund may write put and call options on stocks only if they are covered,
and such options must remain covered so long as the Fund is obligated as a
writer. The Fund will write put options on stock indices and foreign currencies
and futures contracts on foreign currencies only if they are covered by
segregating with the Fund's Custodian an amount of cash, U.S. Government
securities, or liquid assets equal to the aggregate exercise price of the puts.
The Fund has undertaken with certain state securities commissions that, so long
as shares of the Fund are registered in those states, it will not (a) write puts
having aggregate exercise prices greater than 25% of total net assets; or (b)
purchase (i) put options on stocks not held in the Fund's portfolio, (ii) put
options on stock indices, foreign currencies or futures contracts on foreign
currencies or (iii) call options on stocks, stock indices or foreign currencies
if, after any such purchase, the aggregate premiums paid for such options would
exceed 10% of the Fund's total net assets; provided, however, that the Fund may
purchase put options on stocks held by the Fund if after such purchase the
aggregate premiums paid for such options do not exceed 20% of the Fund's total
assets. In addition, the Fund will not enter into futures contracts or related
options if the aggregate initial margin and premiums exceed 5% of the
liquidation value of the Fund's total assets, taking into account unrealized
profits and losses on such contracts, provided, however, that in the case of an
option that is in-the-money, the in-the-money amount may be excluded in
computing such 5%. The above restriction does not apply to the purchase or sale
of futures contracts and related options for bona fide hedging purposes. The
Fund does not intend to purchase options on equity securities or securities
indices if the aggregate premiums paid for such outstanding options would exceed
10% of the Fund's total assets.

B-8
<PAGE>
Except as described below, the Fund will write call options on indices only if
on such date it holds a portfolio of stocks at least equal to the value of the
index times the multiplier times the number of contracts. When the Fund writes a
call option on a broadly-based stock market index, the Fund will segregate or
put into escrow with its Custodian, or pledge to a broker as collateral for the
option, cash, U.S. Government securities, liquid high-grade debt securities or
at least one "qualified security" with a market value at the time the option is
written of not less than 100% of the current index value times the multiplier
times the number of contracts.

If the Fund has written an option on an industry or market segment index, it
will segregate or put into escrow with its Custodian, or pledge to a broker as
collateral for the option, at least ten "qualified securities," all of which are
stocks of issuers in such industry or market segment, with a market value at the
time the option is written of not less than 100% of the current index value
times the multiplier times the number of contracts. Such stocks will include
stocks which represent at least 50% of the weighting of the industry or market
segment index and will represent at least 50% of the Fund's holdings in that
industry or market segment. No individual security will represent more than 15%
of the amount so segregated, pledged or escrowed in the case of broadly-based
stock market index options or 25% of such amount in the case of industry or
market segment index options. If at the close of business on any day the market
value of such qualified securities so segregated, escrowed or pledged falls
below 100% of the current index value times the multiplier times the number of
contracts, the Fund will so segregate, escrow or pledge an amount in cash, U.S.
Government securities or other high-grade short-term debt obligations equal in
value to the difference. In addition, when the Fund writes a call on an index
which is in-the-money at the time the call is written, the Fund will segregate
with its Custodian or pledge to the broker as collateral cash, U.S. Government
securities or other high-grade short-term debt obligations equal in value to the
amount by which the call is in-the-money times the multiplier times the number
of contracts. Any amount segregated pursuant to the foregoing sentence may be
applied to the Fund's obligation to segregate additional amounts in the event
that the market value of the qualified securities falls below 100% of the
current index value times the multiplier times the number of contracts. A
"qualified security" is an equity security which is listed on a national
securities exchange or listed on NASDAQ against which the Fund has not written a
stock call option and which has not been hedged by the Fund by the sale of stock
index futures. However, if the Fund holds a call on the same index as the call
written where the exercise price of the call held is equal to or less than the
exercise price of the call written or greater than the exercise price of the
call written if the difference is maintained by the Fund in cash, Treasury bills
or other high-grade short-term obligations in a segregated account with its
Custodian, it will not be subject to the requirements described in this
paragraph.

The Fund may engage in futures contracts and options on futures transactions
as a hedge against changes, resulting from market or political conditions, in
the value of the currencies to which the Fund is subject or to which the Fund
expects to be subject in connection with future purchases. The Fund may engage
in such transactions when they are economically appropriate for the reduction of
risks inherent in the ongoing management of the Fund. The Fund may write options
on futures contracts to realize through the receipt of premium income a greater
return than would be realized in the Fund's portfolio securities alone.

POSITION LIMITS. Transactions by the Fund in futures contracts and options
will be subject to limitations, if any, established by each of the exchanges,
boards of trade or other trading facilities (including NASDAQ) governing the
maximum number of options in each class which may be written or purchased by a
single investor or group of investors acting in concert, regardless of whether
the options are written on the same or different exchanges, boards of trade or
other trading facilities or are held or written in one or more accounts or
through one or more brokers. Thus, the number of futures contracts and options
which the Fund may write or purchase may be affected by the futures contracts
and options written or purchased by other investment advisory clients of the
investment adviser. An exchange, board of trade or other trading facility may
order the liquidations of positions found to be in excess of these limits, and
it may impose certain other sanctions.

B-9
<PAGE>
DEFENSIVE STRATEGY AND SHORT-TERM INVESTMENTS

When conditions dictate a defensive strategy, the Fund may invest in money
market instruments, including commercial paper of corporations, certificates of
deposit, bankers' acceptances and other obligations of domestic and foreign
banks, obligations issued or guaranteed by the U.S. Government, its agencies or
its instrumentalities and repurchase agreements (described more fully below).
Such investments may be subject to certain risks, including future political and
economic developments, the possible imposition of withholding taxes on interest
income, the seizure or nationalization of foreign deposits and foreign exchange
controls or other restrictions.

WHEN-ISSUED AND DELAYED DELIVERY SECURITIES

From time to time, in the ordinary course of business, the Fund may purchase
or sell securities on a when-issued or delayed delivery basis, that is, delivery
and payment can take place a month or more after the date of the transaction.
The Fund will limit such purchases to those in which the date for delivery and
payment falls within 120 days of the date of the commitment. The Fund will make
commitments for such when-issued transactions only with the intention of
actually acquiring the securities. The Fund's Custodian will maintain, in a
separate account of the Fund, cash, U.S. Government securities or other liquid
high-grade debt obligations having a value equal to or greater than such
commitments. If the Fund chooses to dispose of the right to acquire a
when-issued security prior to its acquisition, it could, as with the disposition
of any other portfolio security, incur a gain or loss due to market
fluctuations. The Fund does not intend to have more than 5% of its net assets
(determined at the time of entering into the transaction) involved in
transactions on a when-issued or delayed delivery basis during the coming year.

SHORT SALES AGAINST-THE-BOX

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

REPURCHASE AGREEMENTS

The Fund's repurchase agreements will be collateralized by U.S. Government
obligations. The Fund will enter into repurchase transactions only with parties
meeting creditworthiness standards approved by the Fund's Board of Directors.
The Fund's investment adviser will monitor the creditworthiness of such parties,
under the general supervision of the Board of Directors. In the event of a
default or bankruptcy by a seller, the Fund will promptly seek to liquidate the
collateral. To the extent that the proceeds from any sale of such collateral
upon a default in the obligation to repurchase are less than the repurchase
price, the Fund will suffer a loss.

The Fund participates in a joint repurchase agreement account with other
investment companies managed by Prudential Mutual Fund Management, Inc. (PMF)
pursuant to an order of the Securities and Exchange Commission (SEC). On a daily
basis, any uninvested cash balances of the Fund may be aggregated with those of
such investment companies and invested in one or more repurchase agreements.
Each fund participates in the income earned or accrued in the joint account
based on the percentage of its investment.

B-10
<PAGE>
LENDING OF SECURITIES

Consistent with applicable regulatory requirements, the Fund may lend its
portfolio securities to brokers, dealers and financial institutions, provided
that outstanding loans do not exceed in the aggregate 30% of the value of the
Fund's total assets and provided that such loans are callable at any time by the
Fund and are at all times secured by cash or equivalent collateral that is equal
to at least the market value, determined daily, of the loaned securities. The
advantage of such loans is that the Fund continues to receive payments in lieu
of the interest and dividends of the loaned securities, while at the same time
earning interest either directly from the borrower or on the collateral which
will be invested in short-term obligations.

A loan may be terminated by the borrower on one business day's notice or by
the Fund at any time. If the borrower fails to maintain the requisite amount of
collateral, the loan automatically terminates, and the Fund could use the
collateral to replace the securities while holding the borrower liable for any
excess of replacement cost over collateral. As with any extensions of credit,
there are risks of delay in recovery and in some cases loss of rights in the
collateral should the borrower of the securities fail financially. However,
these loans of portfolio securities will only be made to firms determined to be
creditworthy pursuant to procedures approved by the Board of Directors of the
Fund. On termination of the loan, the borrower is required to return the
securities to the Fund, and any gain or loss in the market price during the loan
would inure to the Fund.

Since voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, to permit the exercise of such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan. The Fund will pay reasonable finders',
administrative and custodial fees in connection with a loan of its securities or
may share the interest earned on collateral with the borrower.

ILLIQUID SECURITIES

The Fund may not invest more than 5% of its net assets in repurchase
agreements which have a maturity of longer than seven days or in other illiquid
securities, including securities that are illiquid by virtue of the absence of a
readily available market (either within or outside of the United States) or
legal or contractual restrictions on resale. Historically, illiquid securities
have included securities subject to contractual or legal restrictions on resale
because they have not been registered under the Securities Act of 1933, as
amended (Securities Act), securities which are otherwise not readily marketable
and repurchase agreements having a maturity of longer than seven days.
Securities which have not been registered under the Securities Act are referred
to as private placements or restricted securities and are purchased directly
from the issuer or in the secondary market. Mutual funds do not typically hold a
significant amount of these restricted or other illiquid securities because of
the potential for delays on resale and uncertainty in valuation. Limitations on
resale may have an adverse effect on the marketability of portfolio securities
and a mutual fund might be unable to dispose of restricted or other illiquid
securities promptly or at reasonable prices and might thereby experience
difficulty satisfying redemptions within seven days. A mutual fund might also
have to register such restricted securities in order to dispose of them
resulting in additional expense and delay. Adverse market conditions could
impede such a public offering of securities.

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

Rule 144A of the Securities Act allows for a broader institutional trading
market for securities otherwise subject to restriction on resale to the general
public. Rule 144A establishes a "safe harbor" from the registration requirements
of the Securities Act for resales of certain securities to qualified
institutional buyers. The investment adviser anticipates that the market for
certain restricted securities such as institutional commercial paper and foreign
securities will expand further as a

B-11
<PAGE>
result of this new regulation and the development of automated systems for the
trading, clearance and settlement of unregistered securities of domestic and
foreign issuers, such as the PORTAL System sponsored by the National Association
of Securities Dealers, Inc.

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

SECURITIES OF OTHER INVESTMENT COMPANIES

The Fund may invest up to 10% of its total assets in securities of other
investment companies. Generally, the Fund does not intend to invest in such
securities, except as set forth in the Prospectus with respect to certain
countries which do not permit direct foreign equity investments. If the Fund
does invest in securities of other investment companies, shareholders of the
Fund may be subject to duplicate management and advisory fees.

PORTFOLIO TURNOVER

As a result of the investment policies described above, the Fund may engage in
a substantial number of portfolio transactions, but the Fund's portfolio
turnover rate is not expected to exceed 200%. The portfolio turnover rate is
generally the percentage computed by dividing the lesser of portfolio purchases
or sales (excluding all securities, including options, whose maturities or
expiration date at acquisition were one year or less) by the monthly average
value of the portfolio. High portfolio turnover (over 100%) involves
correspondingly greater brokerage commissions and other transaction costs, which
are borne directly by the Fund. In addition, high portfolio turnover may also
mean that a proportionately greater amount of distributions to shareholders will
be taxed as ordinary income rather than long-term capital gains compared to
investment companies with lower portfolio turnover. See "Portfolio Transactions
and Brokerage" and "Taxes."

INVESTMENT RESTRICTIONS

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

The Fund may not:

1. Purchase securities on margin (but the Fund may obtain such short-term
credits as may be necessary for the clearance of transactions); provided that
the deposit or payment by the Fund of initial or maintenance margin in
connection with futures or options is not considered the purchase of a
security on margin.

2. Make short sales of securities or maintain a short position if, when
added together, more than 25% of the value of the Fund's net assets would be
(i) deposited as collateral for the obligation to replace securities borrowed
to effect

B-12
<PAGE>
short sales and (ii) allocated to segregated accounts in connection with
short sales. Short sales "against-the-box" are not subject to this
limitation.

3. Issue senior securities, borrow money or pledge its assets, except
that the Fund may borrow from banks up to 20% of the value of its total
assets (calculated when the loan is made) for temporary, extraordinary or
emergency purposes or for the clearance of transactions. The Fund may pledge
up to 20% of the value of its total assets to secure such borrowings. For
purposes of this restriction, the purchase or sale of securities on a
when-issued or delayed delivery basis, forward foreign currency exchange
contracts and collateral and collateral arrangements relating thereto, and
collateral arrangements with respect to futures contracts and options thereon
and with respect to the writing of options and obligations of the Fund to
Directors pursuant to deferred compensation arrangements are not deemed to be
a pledge of assets or the issuance of a senior security.

4. Purchase any security (other than obligations of the U.S. Government,
its agencies or instrumentalities) if as a result: (i) with respect to 75% of
the Fund's total assets, more than 5% of the Fund's total assets (determined
at the time of investment) would then be invested in securities of a single
issuer, or (ii) 25% or more of the Fund's total assets (determined at the
time of the investment) would be invested in a single industry.

5. Purchase any security if as a result the Fund would then have more
than 5% of its total assets (determined at the time of investment) invested
in securities of companies (including predecessors) less than three years
old, except that the Fund may invest in the securities of any U.S. Government
agency or instrumentality, and in any security guaranteed by such an agency
or instrumentality.

6. Buy or sell real estate or interests in real estate, except that the
Fund may purchase and sell securities which are secured by real estate,
securities of companies which invest or deal in real estate and publicly
traded securities of real estate investment trusts. The Fund may not purchase
interests in real estate limited partnerships which are not readily
marketable.

7. Buy or sell commodities or commodity contracts, except that the Fund
may purchase and sell financial futures contracts and options thereon. (For
purposes of this restriction, futures contracts on currencies and on
securities indices and forward foreign currency exchange contracts are not
deemed to be commodities or commodity contracts.)

8. Act as underwriter except to the extent that, in connection with the
disposition of portfolio securities, it may be deemed to be an underwriter
under certain federal securities laws. The Fund has not adopted a fundamental
investment policy with respect to investments in restricted securities. See
"Illiquid Securities."

9. Make investments for the purpose of exercising control or management.

10. Invest in securities of other investment companies, except by
purchases in the open market involving only customary brokerage commissions
and as a result of which the Fund will not hold more than 3% of the
outstanding voting securities of any one investment company, will not have
invested more than 5% of its total assets in any one investment company and
will not have invested more than 10% of its total assets (determined at the
time of investment) in such securities of one or more investment companies,
or except as part of a merger, consolidation or other acquisition.

11. Invest in interests in oil, gas or other mineral exploration or
development programs, except that the Fund may invest in the securities of
companies which invest in or sponsor such programs.

12. Make loans, except through (i) repurchase agreements and (ii) loans of
portfolio securities limited to 30% of the Fund's total assets.

13. Purchase more than 10% of all outstanding voting securities of any one
issuer.

The foregoing restrictions are fundamental policies that may not be changed
without the approval of a majority of the Fund's voting securities.

B-13
<PAGE>
In order to comply with certain "blue sky" restrictions, the Fund will not as
a matter of operating policy:

1. Invest in oil, gas and mineral leases.

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

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

4. Invest in securities of issuers which are restricted as to disposition,
if more than 15% of its total assets would be invested in such securities.
This restriction shall not apply to mortgage-backed securities, asset-backed
securities or obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.

5. Invest more than 5% of its total assets in securities of unseasoned
issuers, including their predecessors, which have been in operation for less
than three years, and in equity securities of issuers which are not readily
marketable.

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

DIRECTORS AND OFFICERS

<TABLE><CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE FUND DURING PAST 5 YEARS
- -------------------------------- ------------------------ -------------------------------------------------
<S> <C> <C>
Stephen C. Eyre Director Executive Director, The John A. Hartford
c/o Prudential Mutual Foundation, Inc. (charitable foundation) (since
Fund Management, Inc. May 1985); Director of Faircom, Inc..
One Seaport Plaza
New York, NY

Delayne Dedrick Gold Director Marketing and Management Consultant.
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, NY

Don G. Hoff Director Chairman and Chief Executive Officer of Intertec,
c/o Prudential Mutual Inc. (Investments) since 1980; Director of
Fund Management, Inc. Innovative Capital Management, Inc., The Asia
One Seaport Plaza Pacific Fund, Inc. and The Greater China Fund,
New York, NY Inc..
</TABLE>

B-14
<PAGE>
<TABLE><CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE FUND DURING PAST 5 YEARS
- -------------------------------- ------------------------ -------------------------------------------------
<S> <C> <C>
*Harry A. Jacobs, Jr. Director Senior Director (since January 1986) of
One Seaport Plaza Prudential Securities Incorporated (Prudential
New York, NY Securities); formerly Interim Chairman and Chief
Executive Officer of Prudential Mutual Fund Man-
agement, Inc. (PMF) (June-September 1993);
formerly Chairman of the Board of Prudential
Securities (1982-1985) and Chairman and Chief
Executive Officer of Bache Group Inc.
(1977-1982); Trustee of The Trudeau Institute;
Director of The First Australia Fund, Inc., The
First Australia Prime Income Fund, Inc., The
Global Government Plus Fund, Inc., The Global
Total Return Fund, Inc. and the Center for
National Policy.

Sidney R. Knafel Director Managing Partner of SRK Management Company
c/o Prudential Mutual (investments) since 1981; Chairman of Insight
Fund Management, Inc. Communications Company, L.P., Microbiological
One Seaport Plaza Associates, Inc.; Director of Cellular
New York, NY Communications, Inc., Cellular Communications
International, Inc., Cellular Communications of
Puerto Rico, Inc.,General American Investors
Company, Inc., IGENE Biotechnology, Inc.,
International CableTel Incorporated, Medical
Imaging Centers of America, Inc. and a number of
private companies.

Robert E. LaBlanc Director President of Robert E. LaBlanc Associates, Inc.
c/o Prudential Mutual (telecommunications) since 1981; Director of
Fund Management, Inc. Contel Cellular, Inc., M/A- COM, Inc., Storage
One Seaport Plaza Technology Corporation, TIE/communications, Inc.
New York, NY and Tribune Company; Trustee of Manhattan
College.

*Lawrence C. McQuade President and Director Vice Chairman of PMF (since 1988) and Managing
One Seaport Plaza Director, Investment Banking of Prudential
New York, NY Securities (1988-1991); Director of Czech &
Slovak American Enterprise Fund (since October
1994), Quixote Corporation (since February
1992), BUNZL, P.L.C. (since June 1991); formerly
Director of Crazy Eddie Inc. (1987-1990) and
Kaiser Tech., Ltd. and Kaiser Aluminum and
Chemical Corp. (March 1987-November 1988);
formerly Executive Vice President and Director
of W. R. Grace & Co. (1975-1987); President and
Director of The High Yield Income Fund, Inc.,
The Global Total Return Fund, Inc. and The
Global Government Plus Fund, Inc.

Thomas A. Owens, Jr. Director Consultant
c/o Prudential Mutual
Fund Management, Inc.
One Seaport Plaza
New York, NY

</TABLE>

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

* Interested director, as defined in the Investment Company Act, by reason of
his affiliation with Prudential Securities or PMF.

B-15
<PAGE>
<TABLE><CAPTION>
POSITION WITH PRINCIPAL OCCUPATIONS
NAME AND ADDRESS THE FUND DURING PAST 5 YEARS
- -------------------------------- ------------------------ -------------------------------------------------
<S> <C> <C>
*Richard A. Redeker Director President, Chief Executive Officer and Director
One Seaport Plaza (since October 1993); PMF; Executive Vice
New York, NY President, Director and Member of the Operating
Committee (since October 1993); Prudential
Securities; Director (since October 1993) of
Prudential Securities Group, Inc. (PSG); Vice
President, The Prudential Investment Corporation
(since July 1994); formerly Senior Executive
Vice President and Director of Kemper Financial
Services, Inc. (September 1978-September 1993);
Director of The Global Government Plus Fund,
Inc. ,The Global Total Return Fund, Inc. and The
High Yield Income Fund, Inc.

Clay T. Whitehead Director President of National Exchange Inc. (since May
c/o Prudential Mutual Fund 1983).
Management, Inc.
One Seaport Plaza
New York, NY

Robert F. Gunia Vice President Director (since January 1989), Chief
One Seaport Plaza Administrative Officer (since July 1990) and
New York, NY Executive Vice President, Treasurer and Chief
Financial Officer (since June 1987) of PMF;
Senior Vice President (since March 1987) of
Prudential Securities; Vice President and
Director of The Asia Pacific Fund, Inc. (since
May 1989).

S. Jane Rose Secretary Senior Vice President (since January 1991),
One Seaport Plaza Senior Counsel (since June 1987) and First Vice
New York, NY President (June 1987- December 1990) of PMF;
Senior Vice President and Senior Counsel of
Prudential Securities (since July 1992);
formerly Vice President and Associate General
Counsel of Prudential Securities.

Susan C. Cote Treasurer and Principal Senior Vice President (since January 1989) of
One Seaport Plaza Financial and Account- PMF; Senior Vice President (since January 1992)
New York, NY ing Officer and Vice President (January 1986-December 1991)
of Prudential Securities.
</TABLE>

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

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

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

The Fund pays each of its Directors who is not an affiliated person of PMF or
The Prudential Investment Corporation (PIC) annual compensation of $6,000, in
addition to certain out-of-pocket expenses.

Directors may receive their Directors' fees pursuant to a deferred fee
agreement with the Fund. Under the terms of the agreement, the Fund accrues
daily the amount of Directors' fees which accrue interest at a rate equivalent
to the prevailing rate applicable to 90-day U.S. Treasury bills at the beginning
of each calendar quarter or, pursuant to an SEC exemptive order, at the daily
rate of return of the Fund (the Fund rate). Payment of the interest so accrued
is also deferred and accruals

- ------------
* Interested director, as defined in the Investment Company Act, by reason of
his affiliation with Prudential Securities or PMF.

B-16
<PAGE>
become payable at the option of the Director. The Fund's obligation to make
payments of deferred Directors' fees, together with interest thereon, is a
general obligation of the Fund.

As of December 2, 1994, the Directors and officers of the Fund, as a group,
owned less than 1% of the outstanding common stock of the Fund.

As of December 2, 1994, the only beneficial owners, directly or indirectly, of
more than 5% of the outstanding common stock of the Prudential Pacific Growth
Fund, Inc. were Prudential Securities C/F, Sherwin B. Kite IRA Transfer, 30 S
Wacker Drive #900, Chicago, IL 60606-7488, who held 8,377 Class C shares (9.8%);
Barry S. Cohn Pension and Trust, 2505 Astor Ct, Glenview, IL 60025-1185, who
held 4,501 Class C shares (5.2%); and Prudential Securities C/F Gregg R.
Schneider, 3434 Vantage Lane, Glenview, IL 60025-1365, who held 6,991 Class C
shares (8.0%).

As of December 2, 1994, Prudential Securities was the record holder for other
beneficial owners of 3,384,975 Class A shares (or 58% of the outstanding Class A
shares), 22,197,638 Class B shares (or 80% of the outstanding Class B shares)
and 76,508 Class C shares (or 88% of the outstanding Class C shares) of the
Fund. In the event of any meetings of shareholders, Prudential Securities will
forward, or cause the forwarding of, proxy materials to the beneficial owners
for which it is the record holder.

MANAGER

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

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

For its services, PMF receives, pursuant to the Management Agreement, a fee at
an annual rate of .75 of 1% of the Fund's average daily net assets. The fee is
computed daily and payable monthly. The Management Agreement also provides that,
in the event the expenses of the Fund (including the fees of PMF, but excluding
interest, taxes, brokerage commissions, distribution fees and litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business) for any fiscal year exceed the lowest
applicable annual expense limitation established and enforced pursuant to the
statutes or regulations of any jurisdiction in which the Fund's shares are
qualified for offer and sale, the compensation due to PMF will be reduced by the
amount of such excess. Reductions in excess of the total compensation payable to
PMF will be paid by PMF to the Fund. No such reductions were required during the
fiscal year ended October 31, 1994. Currently, the Fund believes that the most
restrictive expense limitation of state securities commissions is 2 1/2% of the
Fund's average daily net assets up to $30 million, 2% of the next $70 million of
such assets and 1 1/2% of such assets in excess of $100 million. Because the
expenses incurred by the Fund are anticipated to be higher than those of funds
that

B-17
<PAGE>
invest only in U.S. securities, the Fund has received waivers from applicable
state expense limitations to exclude certain foreign transactional expenses
subject to the limitation.

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

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

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

(c) the costs and expenses payable to PIC pursuant to the Subadvisory
Agreement between PMF and PIC (the Subadvisory Agreement).

Under the terms of the Management Agreement, the Fund is responsible for the
payment of the following expenses: (a) the fees payable to the Manager, (b) the
fees and expenses of Directors who are not affiliated persons of the Manager or
the Fund's investment adviser, (c) the fees and certain expenses of the
Custodian and Transfer and Dividend Disbursing Agent, including the cost of
providing records to the Manager in connection with its obligation of
maintaining required records of the Fund and of pricing the Fund's shares, (d)
the charges and expenses of legal counsel and independent accountants for the
Fund, (e) brokerage commissions and any issue or transfer taxes chargeable to
the Fund in connection with its securities transactions, (f) all taxes and
corporate fees payable by the Fund to governmental agencies, (g) the fees of any
trade associations of which the Fund may be a member, (h) the cost of stock
certificates representing shares of the Fund, (i) the cost of fidelity and
liability insurance, (j) certain organization expenses of the Fund and the fees
and expenses involved in registering and maintaining registration of the Fund
and of its shares with the SEC, registering the Fund and qualifying its shares
under state securities laws, including the preparation and printing of the
Fund's registration statements and prospectuses for such purposes, (k) allocable
communications expenses with respect to investor services and all expenses of
shareholders' and Directors' meetings and of preparing, printing and mailing
reports, proxy statements and prospectuses to shareholders in the amount
necessary for distribution to the shareholders, (l) litigation and
indemnification expenses and other extraordinary expenses not incurred in the
ordinary course of the Fund's business and (m) distribution fees.

The Management Agreement provides that PMF will not be liable for any error of
judgment or for any loss suffered by the Fund in connection with the matters to
which the Management Agreement relates, except a loss resulting from willful
misfeasance, bad faith, gross negligence or reckless disregard of duty. The
Management Agreement provides that it will terminate automatically if assigned,
and that it may be terminated without penalty by either party upon not more than
60 days' nor less than 30 days' written notice. The Management Agreement will
continue in effect for a period of more than two years from the date of
execution only so long as such continuance is specifically approved at least
annually in conformity with the Investment Company Act. The Management Agreement
was approved by the Board of Directors of the Fund, including a majority of the
Directors who are not parties to the contract or interested persons of any such
party, as defined in the Investment Company Act, on June 6, 1994, and by the
initial shareholder of the Fund on June 25, 1992.

For the fiscal years ended October 31, 1994 and 1993 and for the period July
24, 1992 (commencement of investment operations) to October 31, 1992, PMF
received management fees of $3,726,394 (.75% of the average daily net assets)
$756,412 (.75% of the average daily net assets) and $59,403 (.75% of the average
net assets of the Fund), respectively.

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

B-18
<PAGE>
The Subadvisory Agreement was approved by the Board of Directors, including a
majority of the Directors who are not parties to the contract or interested
persons of any such party, as defined in the Investment Company Act, on June 6,
1994, and by the initial shareholder of the Fund on June 25, 1992.

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

The Manager and the Subadviser (The Prudential Investment Corporation) are
subsidiaries of The Prudential which, as of December 31, 1993, was the largest
insurance company in North America. Prudential has been engaged in the insurance
business since 1875. In July 1994, Institutional Investor ranked The Prudential
the second largest institutional money manager of the 300 largest money
management organizations in the United States as of December 31, 1993.

DISTRIBUTOR

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

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

On June 4, 1992, the Board of Directors, including a majority of the Directors
who are not interested persons of the Fund and who have no direct or indirect
financial interest in the operation of the Class A or Class B Plan or in any
agreement related to either Plan (the Rule 12b-1 Directors), at a meeting called
for the purpose of voting on each Plan, adopted a plan of distribution for the
Class A shares and Class B shares of the Fund (the Class A Plan and Class B
Plan, respectively). On June 3, 1993, the Board of Directors, including a
majority of the Rule 12b-1 Directors, at a meeting called for the purpose of
voting on each Plan, approved the continuance of the Plans and Distribution
Agreements and approved modifications of the Fund's Class A and Class B Plans
and Distribution Agreements to conform them with recent amendments to the
National Association of Securities Dealers, Inc. (NASD) maximum sales charge
rule described below. As so modified, the Class A Plan provides that (i) up to
.25 of 1% of the average daily net assets of the Class A shares may be used to
pay for personal service and the maintenance of shareholder accounts (service
fee) and (ii) total distribution fees (including the service fee of .25 of 1%)
may not exceed .30 of 1%. As so modified, the Class B Plan provides that (i) up
to .25 of 1% of the average daily net assets of the Class B shares may be paid
as a service fee and (ii) up to .75 of 1% (not including the service fee) of the
average daily net assets of the Class B shares (asset-based sales charge) may be
used as reimbursement for distribution-related expenses with respect to the
Class B shares. On June 3, 1993, the Board of Directors, including a majority of
the Rule 12b-1 Directors, at a meeting called for the purpose of voting on each
Plan, adopted a plan of distribution for the Class C shares of the Fund and
approved further amendments to the plans of distribution for the Fund's Class A
and Class B shares changing them from reimbursement type plans to compensation
type plans. The Class A Plan, as amended, was approved by Class A and Class B
shareholders, and the Class B Plan, as amended, was approved by Class B
shareholders on July 19, 1994. The Class C Plan was approved by the sole
shareholder of Class C shares on August 1, 1994.

CLASS A PLAN. For the fiscal year ended October 31, 1994, PMFD received
payments of $224,701, under the Class A Plan. This amount was expended on
commission credits to Prudential Securities and Pruco Securities Corporation, an
affiliated

B-19
<PAGE>
broker-dealer (Prusec), for payments of commissions and account servicing fees
to financial advisers and other persons who sell Class A shares. For the fiscal
year ended October 31, 1994, PMFD also received approximately $1,380,600 in
initial sales charges.

CLASS B PLAN. For the fiscal year ended October 31, 1994, Prudential
Securities received $4,045,063 from the Fund under the Class B Plan and spent
approximately $8,137,500 in distributing the Class B shares of the Fund. It is
estimated that of the latter amount approximately $287,600 (3.6%) was spent on
interest and/or carrying costs; $107,800 (1.3%) on printing and mailing of
prospectuses to other than current shareholders; $1,311,400 (16.1%) on
compensation to Prusec for commissions to its representatives and other
expenses, including an allocation on account of overhead and other branch office
distribution-related expenses incurred by it for distribution of Class B shares;
and $6,430,700 (79.0%) on the aggregate of (i) payments of commissions and
account servicing fees to its financial advisers ($3,626,600 or 44.6%) and (ii)
an allocation on account of overhead and other branch office
distribution-related expenses (2,804,100 or 34.4%); The term "overhead and other
branch office distribution-related expenses" represents (a) the expenses of
operating Prusec's and Prudential Securities' branch offices in connection with
the sale of Fund shares, including lease costs, the salaries and employee
benefits of operations and sales support personnel, utility costs,
communications costs and the costs of stationery and supplies, (b) the costs of
client sales seminars, (c) expenses of mutual fund sales coordinators to promote
the sale of Fund shares, and (d) other incidental expenses relating to branch
promotion of Fund sales.

Prudential Securities also receives the proceeds of contingent deferred sales
charges paid by holders of Class B shares upon certain redemptions of Class B
shares. See "Shareholder Guide--How to Sell Your Shares--Contingent Deferred
Sales Charges" in the Prospectus. For the fiscal year ended October 31, 1994,
Prudential Securities received approximately $1,080,500 in contingent deferred
sales charges.

CLASS C PLAN. Prudential Securities receives the proceeds of contingent
deferred sales charges paid by investors upon certain redemptions of Class C
shares. See "Shareholder Guide--How to Sell Your Shares--Contingent Deferred
Sales Charges" in the Prospectus. For the period August 1, 1994 (inception of
Class C shares) through October 31, 1994, Prudential Securities received $1,128
from the Fund under the Class C Plan and spent approximately $6,600 in
distributing the Class C shares of the Fund.

The Class A, Class B and Class C Plans will continue in effect from year to
year, provided that each such continuance is approved at least annually by a
vote of the Board of Directors, including a majority vote of the Rule 12b-1
Directors, cast in person at a meeting called for the purpose of voting on such
continuance. The Plans may each be terminated at any time, without penalty, by
the vote of a majority of the Rule 12b-1 Directors or by the vote of the holders
of a majority of the outstanding shares of the applicable class on not more than
30 days' written notice to any other party to the Plans. The Plans may not be
amended to increase materially the amounts to be spent for the services
described therein without approval by the shareholders of the applicable class
(by both Class A and Class B shareholders, voting separately, in the case of
material amendments to the Class A Plan), and all material amendments are
required to be approved by the Board of Directors in the manner described above.
Each Plan will automatically terminate in the event of its assignment. The Fund
will not be contractually obligated to pay expenses incurred under any Plan if
it is terminated or not continued.

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

Pursuant to each Distribution Agreement, the Fund has agreed to indemnify PMFD
and Prudential Securities to the extent permitted by applicable law against
certain liabilities under the Securities Act. Each Distribution Agreement was
last approved by the Board of Directors, including a majority of the Rule 12b-1
Directors, on June 6, 1994.

NASD MAXIMUM SALES CHARGE RULE. Pursuant to rules of the NASD, the Distributor
is required to limit aggregate initial sales charges, deferred sales charges and
asset-based sales charges to 6.25% of total gross sales of each class of shares.

B-20
<PAGE>
Interest charges on unreimbursed distribution expenses equal to the prime rate
plus one percent per annum may be added to the 6.25% limitation. Sales from the
reinvestment of dividends and distributions are not required to be included in
the calculation of the 6.25% limitation. The annual asset-based sales charge on
shares of the Fund may not exceed .75 of 1% per class. The 6.25% limitation
applies to the Fund rather than on a per shareholder basis. If aggregate sales
charges were to exceed 6.25% of total gross sales of any class, all sales
charges on shares of that class would be suspended.

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

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

On October 27, 1994, Prudential Securities Group, Inc. and PSI entered into
agreements with the United States Attorney deferring prosecution (provided PSI
complies with the terms of the agreement for three years) for any alleged
criminal activity related to the sale of certain limited partnership programs
from 1983 to 1990. In connection with these agreements, PSI agreed to add the
sum of $330,000,000 to the Fund established by the SEC and executed a
stipulation providing for a reversion of such funds to the United States Postal
Inspection Service. PSI further agreed to obtain a mutually acceptable outside
director to sit on the Board of Directors of PSG and the Compliance Committee of
PSI. The new director will also serve as an independent "ombudsman" whom PSI
employees can call anonymously with complaints about ethics and compliance.
Prudential Securities shall report any allegations or instances of criminal
conduct and material improprieties to the new director. The new director will
submit compliance reports which shall identify all such allegations or instances
of criminal conduct and material improprieties every three months for a
three-year period.

B-21
<PAGE>
PORTFOLIO TRANSACTIONS AND BROKERAGE

The Manager is responsible for decisions to buy and sell securities, futures
and options on securities and futures for the Fund, the selection of brokers,
dealers and futures commission merchants to effect the transactions and the
negotiation of brokerage commissions, if any. The term "Manager" as used in this
section includes the Subadviser. On a national securities exchange,
broker-dealers may receive negotiated brokerage commissions on Fund portfolio
transactions, including options and the purchase and sale of underlying
securities upon the exercise of options. On foreign securities exchanges,
commissions may be fixed. Orders may be directed to any broker or futures
commission merchant including, to the extent and in the manner permitted by
applicable law, Prudential Securities and its affiliates.

Equity securities traded in the over-the-counter market and bonds, including
convertible bonds, are generally traded on a "net" basis with dealers acting as
principal for their own accounts without a stated commission, although the price
of the security usually includes a profit to the dealer. In underwritten
offerings, securities are purchased at a fixed price which includes an amount of
compensation to the underwriter, generally referred to as the underwriter's
concession or discount. On occasion, certain money market instruments and U.S.
Government agency securities may be purchased directly from the issuer, in which
case no commissions or discounts are paid. The Fund will not deal with
Prudential Securities or any affiliate in any transaction in which Prudential
Securities or any affiliate acts as principal. Thus, it will not deal with
Prudential Securities acting as market maker, and it will not execute a
negotiated trade with Prudential Securities if execution involves Prudential
Securities' acting as principal with respect to any part of the Fund's order.

In placing orders for portfolio securities of the Fund, the Manager is
required to give primary consideration to obtaining the most favorable price and
efficient execution. Within the framework of this policy, the Manager will
consider the research and investment services provided by brokers, dealers or
futures commission merchants who effect or are parties to portfolio transactions
of the Fund, the Manager or the Manager's other clients. Such research and
investment services are those which brokerage houses customarily provide to
institutional investors and include statistical and economic data and research
reports on particular companies and industries. Such services are used by the
Manager in connection with all of its investment activities, and some of such
services obtained in connection with the execution of transactions for the Fund
may be used in managing other investment accounts. Conversely, brokers, dealers
or futures commission merchants furnishing such services may be selected for the
execution of transactions of such other accounts, whose aggregate assets are far
larger than the Fund's, and the services furnished by such brokers, dealers or
futures commission merchants may be used by the Manager in providing investment
management for the Fund. Commission rates are established pursuant to
negotiations with the broker, dealer or futures commission merchant based on the
quality and quantity of execution services provided by the broker in the light
of generally prevailing rates. The Manager's policy is to pay higher commissions
to brokers, other than Prudential Securities, for particular transactions than
might be charged if a different broker had been selected, on occasions when, in
the Manager's opinion, this policy furthers the objective of obtaining best
price and execution. In addition, the Manager is authorized to pay higher
commissions on brokerage transactions for the Fund to brokers other than
Prudential Securities in order to secure research and investment services
described above, subject to review by the Fund's Board of Directors from time to
time as to the extent and continuation of this practice. The allocation or
orders among brokers and the commission rates paid are reviewed periodically by
the Fund's Board of Directors. The Fund will not pay up for research in
principal transactions.

Portfolio securities may not be purchased from any underwriting or selling
syndicate of which Prudential Securities, or any affiliate, during the existence
of the syndicate, is a principal underwriter (as defined in the Investment
Company Act), except in accordance with rules of the SEC. This limitation, in
the opinion of the Fund, will not significantly affect the Fund's ability to
pursue its present investment objective. However, in the future in other
circumstances, the Fund may be at a disadvantage because of this limitation in
comparison to other funds with similar objectives but not subject to such
limitations.

B-22
<PAGE>
Subject to the above considerations, Prudential Securities may act as a
securities broker or futures commission merchant for the Fund. In order for
Prudential Securities (or any affiliate) to effect any portfolio transactions
for the Fund, the commissions, fees or other remuneration received by Prudential
Securities (or any affiliate) must be reasonable and fair compared to the
commissions, fees or other remuneration paid to other brokers or futures
commission merchants in connection with comparable transactions involving
similar securities or futures being purchased or sold on an exchange during a
comparable period of time. This standard would allow Prudential Securities (or
any affiliate) to receive no more than the remuneration which would be expected
to be received by an unaffiliated broker or futures commission merchant in a
commensurate arm's-length transaction. Furthermore, the Board of Directors of
the Fund, including a majority of the noninterested Directors, has adopted
procedures which are reasonably designed to provide that any commissions, fees
or other remuneration paid to Prudential Securities (or any affiliate) are
consistent with the foregoing standard. In accordance with Section 11(a) under
the Securities Exchange Act of 1934, Prudential Securities may not retain
compensation for effecting transactions on a national securities exchange for
the Fund unless the Fund has expressly authorized the retention of such
compensation. Prudential Securities must furnish to the Fund at least annually a
statement setting forth the total amount of all compensation retained by
Prudential Securities from transactions effected for the Fund during the
applicable period. Brokerage and futures transactions with Prudential Securities
(or any affiliate) are also subject to such fiduciary standards as may be
imposed upon Prudential Securities (or such affiliate) by applicable law.

For the fiscal years ended October 31, 1994 and October 31, 1993 and for the
period July 24, 1992 (commencement of investment operations) to October 31, 1992
the Fund paid brokerage commissions of $3,003,304, $6,500 and $115,652,
respectively, none of which were paid to Prudential Securities.

PURCHASE AND REDEMPTION OF FUND SHARES

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

SPECIMEN PRICE MAKE-UP
Under the current distribution arrangements between the Fund and the
Distributor, Class A shares are sold at a maximum sales charge of 5% and Class
B* and Class C* shares are sold at net asset value. Using the Fund's net asset
value at October 31, 1994, the maximum offering price of the Fund's shares is as
follows:

<TABLE>
<S> <C>
CLASS A
Net asset value and redemption price per Class A share..................... $16.90
Maximum sales charge (5% of offering price)................................ .89
------
Offering price to public................................................... $17.79
------
------
CLASS B
Net asset value, offering price and redemption price to public per Class B
share*..................................................................... $16.62
------
------
CLASS C
Net asset value, offering price and redemption price per Class C share*.... $16.62
------
------
</TABLE>

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

B-23
<PAGE>
REDUCTION OR WAIVER OF INITIAL SALES CHARGES--CLASS A SHARES

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

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

(a) an individual;

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

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

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

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

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

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

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

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

LETTERS OF INTENT. Reduced sales charges are available to investors or an
eligible group of related investors), including retirement and group plans, who
enter into a written Letter of Intent providing for the purchase, within a
thirteen-month period, of shares of the Fund and shares of other Prudential
Mutual Funds. All shares of the Fund and shares of other Prudential Mutual Funds
(excluding money market funds other than those acquired pursuant to the exchange
privilege) which were previously purchased and are still owned are also included
in determining the applicable reduction. However, the value of shares held
directly with the Transfer Agent and through Prudential Securities will not be
aggregated to determine the reduced

B-24
<PAGE>
sales charge. All shares must be held either directly with the Transfer Agent or
through Prudential Securities. The Distributor must be notified at the time of
purchase that the investor is entitled to a reduced sales charge. The reduced
sales charges will be granted subject to confirmation of the investor's
holdings. Letters of Intent are not available to individual participants in any
retirement or group plans.

A Letter of Intent permits a purchaser to establish a total investment goal to
be achieved by any number of investments over a thirteen-month period. Each
investment made during the period will receive the reduced sales charge
applicable to the amount represented by the goal, as if it were a single
investment. Escrowed Class A shares totaling 5% of the dollar amount of the
Letter of Intent will be held by the Transfer Agent in the name of the
purchaser, except in the case of retirement and group plans where the employer
or plan sponsor will be responsible for paying any applicable sales charge. The
effective date of a Letter of Intent may be back-dated up to 90 days, in order
that any investments made during this 90-day period, valued at the purchaser's
cost, can be applied to the fulfillment of the Letter of Intent goal, except in
the case of retirement and group plans.

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

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

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

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

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

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

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

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

B-25
<PAGE>
QUANTITY DISCOUNT--CLASS B SHARES PURCHASED PRIOR TO AUGUST 1, 1994. The CDSC
is reduced on redemptions of Class B shares of the Fund purchased prior to
August 1, 1994 if immediately after a purchase of such shares, the aggregate
cost of all Class B shares of the Fund owned by you in a single account exceeds
$500,000. For example, if you purchased $100,000 of Class B shares of the Fund
and the following year purchase an additional $450,000 of Class B shares with
the result that the aggregate cost of your Class B shares of the Fund following
the second purchase was $550,000, the quantity discount would be available for
the second purchase of $450,000 but not for the first purchase of $100,000. The
quantity discount will be imposed at the following rates depending on whether
the aggregate value exceeded $500,000 or $1 million:

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

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

SHAREHOLDER INVESTMENT ACCOUNT

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

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

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

B-26
<PAGE>
It is contemplated that the Exchange Privilege may be applicable to new mutual
funds whose shares may be distributed by the Distributor.

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

The following money market funds participate in the Class A Exchange
Privilege:

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

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

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

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

B-27
<PAGE>
exchange privilege that were acquired through reinvestment of dividends or
distributions may be exchanged for Class B or Class C shares of other funds,
respectively, without being subject to any CDSC.

Additional details about the Exchange Privilege and prospectuses for each of
the Prudential Mutual Funds are available from the Fund's Transfer Agent,
Prudential Securities or Prusec. The Exchange Privilege may be modified,
terminated or suspended on 60 days' notice, and any fund, including the Fund, or
the Distributor, has the right to reject any exchange application relating to
such fund's shares.

DOLLAR COST AVERAGING

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

Dollar cost averaging may be used, for example, to plan for retirement, to
save for a major expenditure, such as the purchase of a home, or to finance a
college education. The cost of a year's education at a four-year college today
averages around $14,000 at a private college and around $4,800 at a public
university. Assuming these costs increase at a rate of 7% a year, as has been
projected, for the freshman class of 2007, the cost of four years at a private
college could reach $163,000 and over $97,000 at a public university.1

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

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

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

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

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

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

SYSTEMATIC WITHDRAWAL PLAN. A systematic withdrawal plan is available to
shareholders through Prudential Securities or the Transfer Agent. Such
withdrawal plan provides for monthly or quarterly checks in any amount, except
as provided below, up

B-28
<PAGE>
to the value of the shares in the shareholder's account. Withdrawals of Class B
or Class C shares may be subject to a CDSC. See "Shareholder Guide--How to Sell
Your Shares--Contingent Deferred Sales Charges" in the Prospectus.

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

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

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

Furthermore, each withdrawal constitutes a redemption of shares, and any gain
or loss realized must be recognized for federal income tax purposes. In
addition, withdrawals made concurrently with purchases of additional shares are
inadvisable because of the sales charges applicable to (i) the purchase of Class
A shares and (ii) the withdrawal of Class B and Class C shares. Each shareholder
should consult his or her own tax adviser with regard to the tax consequences of
the plan, particularly if used in connection with a retirement plan.

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

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

TAX-DEFERRED RETIREMENT ACCOUNTS

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

TAX-DEFERRED COMPOUNDING1

CONTRIBUTIONS PERSONAL
MADE OVER: SAVINGS IRA
- ------------- --------- --------

10 years $ 26,165 $ 31,291
15 years 44,676 58,649
20 years 68,109 98,846
25 years 97,780 157,909
30 years 135,346 244,692

- ------------
1 The chart is for illustrative purposes only and does not represent the
performance of the Fund or any specific investment. It shows taxable versus
tax-deferred compounding for the periods and on the terms indicated. Earnings
in the IRA account will be subject to tax when withdrawn from the account.

B-29
<PAGE>
NET ASSET VALUE

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

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

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

TAXES

The Fund intends to qualify and to remain qualified as a regulated investment
company under Subchapter M of the Internal Revenue Code. This relieves the Fund
(but not its shareholders) from paying federal income tax on income which is

B-30
<PAGE>
distributed to shareholders and permits net long-term capital gains of the Fund
(i.e., the excess of net long-term capital gains over net short-term capital
losses) to be treated as long-term capital gains of the shareholders, regardless
of how long shareholders have held their shares in the Fund.

Qualification as a regulated investment company requires, among other things,
that (a) at least 90% of the Fund's annual gross income (without reduction for
losses from the sale or other disposition of securities) be derived from
interest, dividends, payments with respect to securities loans, and gains from
the sale or other disposition of securities or options thereon or foreign
currencies, or other income (including, but not limited to, gains from options,
futures or forward contracts) derived with respect to its business of investing
in such securities or currencies; (b) the Fund derive less than 30% of its gross
income from gains (without reduction for losses) from the sale or other
disposition of securities, options thereon, futures contracts, options thereon,
forward contracts and foreign currencies held for less than three months (except
for foreign currencies directly related to the Fund's business of investing in
foreign securities) (the short-short rule); (c) the Fund diversify its holdings
so that, at the end of each quarter of the taxable year (i) at least 50% of the
market value of the Fund's assets is represented by cash, U.S. Government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the market value of the Fund's assets and 10% of
the outstanding voting securities of such issuer, and (ii) not more than 25% of
the value of its assets is invested in the securities of any one issuer (other
than U.S. Government securities); and (d) the Fund distribute to its
shareholders at least 90% of its net investment income (including short-term
capital gains) other than long-term capital gains in each year.

Gains or losses on sales of securities by the Fund will be treated as
long-term capital gains or losses if the securities have been held by it for
more than one year except in certain cases where the Fund acquires a put or
writes a call thereon or makes a short sale against-the-box. Other gains or
losses on the sale of securities will be short-term capital gains or losses.
Gains and losses on the sale, lapse or other termination of options on
securities will generally be treated as gains and losses from the sale of
securities (assuming they do not qualify as Section 1256 contracts). If an
option written by the Fund on securities lapses or is terminated through a
closing transaction, such as a repurchase by the Fund of the option from its
holder, the Fund will generally realize capital gain or loss. If securities are
sold by the Fund pursuant to the exercise of a call option written by it, the
Fund will include the premium received in the sale proceeds of the securities
delivered in determining the amount of gain or loss on the sale. Certain of the
Fund's transactions may be subject to wash sale, short sale and straddle
provisions of the Internal Revenue Code. In addition, debt securities acquired
by the Fund may be subject to original issue discount and market discount rules.

Special rules apply to most options on stock indices, futures contracts and
options thereon, and forward foreign currency exchange contracts in which the
Fund may invest. See "Investment Objective and Policies." These investments will
generally constitute Section 1256 contracts and will be required to be "marked
to market" for federal income tax purposes at the end of the Fund's taxable
year; that is, treated as having been sold at market value. Except with respect
to forward foreign currency exchange contracts, 60% of any gain or loss
recognized on such deemed sales and on actual dispositions will be treated as
long-term capital gain or loss, and the remainder will be treated as short-term
capital gain or loss.

Gain or loss on the sale, lapse or other termination of options on stock and
on narrowly-based stock indices will be capital gain or loss and will be
long-term or short-term depending upon the holding period of the option. In
addition, positions which are part of a straddle will be subject to certain wash
sale and short sale provisions of the Internal Revenue Code. In the case of a
straddle, the Fund may be required to defer the recognition of losses on
positions it holds to the extent of any unrecognized gain on offsetting
positions held by the Fund.

The Fund's ability to hold foreign currencies or engage in hedging activities
may be limited by the 30%-of-income qualification test discussed above.

B-31
<PAGE>
A "passive foreign investment company" (PFIC) is a foreign corporation that,
in general, meets either of the following tests: (a) at least 75% of its gross
income is passive or (b) an average of at least 50% of its assets produce, or
are held for the production of, passive income. If the Fund acquires and holds
stock in a PFIC beyond the end of the year of its acquisition, the Fund will be
subject to federal income tax on a portion of any "excess distribution" received
on the stock or of any gain from disposition of the stock (collectively PFIC
Income), plus interest thereon, even if the Fund distributes the PFIC income as
a taxable dividend to its shareholders. The balance of the PFIC income will be
included in the Fund's investment company taxable income and, accordingly, will
not be taxable to it to the extent that income is distributed to its
shareholders. Proposed Treasury regulations provide that the Fund may make a
"mark-to-market" election with respect to any stock it holds of a PFIC. If the
election is in effect, at the end of the Fund's taxable year, the Fund will
recognize the amount of gains, if any, with respect to PFIC stock. No loss will
be recognized on PFIC stock. Alternatively, the Fund may elect to treat any PFIC
in which it invests as a "qualified electing fund," in which case, in lieu of
the foregoing tax and interest obligation, the Fund will be required to include
in income each year its pro rata share of the qualified electing fund's annual
ordinary earnings and net capital gain, even if they are not distributed to the
Fund; those amounts would be subject to the distribution requirements applicable
to the Fund described above. It may be very difficult, if not impossible, to
make this election because of certain requirements thereof. Proposed legislation
in Congress could dramatically change the manner in which U.S. shareholders of
foreign corporations are taxed. There can be no assurance that any such
legislation will become law, or if so, what its impact on U.S. shareholders of
foreign corporations will be.

Under the Internal Revenue Code, gains or losses attributable to fluctuations
in exchange rates which occur between the time the Fund accrues interest or
other receivables or accrues expenses or other liabilities denominated in a
foreign currency and the time the Fund actually collects such receivables or
pays such liabilities are treated as ordinary income or ordinary loss.
Similarly, gains or losses on forward foreign currency exchange contracts or
dispositions of debt securities denominated in a foreign currency attributable
to fluctuations in the value of the foreign currency between the date of
acquisition of the security and the date of disposition also are treated as
ordinary gain or loss. These gains, referred to under the Internal Revenue Code
as "Section 988" gains or losses, increase or decrease the amount of the Fund's
investment company taxable income available to be distributed to its
shareholders as ordinary income, rather than increasing or decreasing the amount
of the Fund's net capital gain. If Section 988 losses exceed other investment
company taxable income during a taxable year, the Fund would not be able to make
any ordinary dividend distributions, or distributions made before the losses
were realized would be recharacterized as a return of capital to shareholders,
rather than as an ordinary dividend, reducing each shareholder's basis in his or
her Fund shares.

The Fund is required to distribute 98% of its ordinary income in the same
calendar year in which it is earned. The Fund is also required to distribute
during the calendar year 98% of the capital gain net income it earned during the
12 months ending on October 31 of such calendar year, as well as all
undistributed ordinary income and undistributed capital gain net income from the
prior year or the twelve-month period ending on October 31 of such prior year,
respectively. To the extent it does not meet these distribution requirements,
the Fund will be subject to a nondeductible 4% excise tax on the undistributed
amount. For purposes of this excise tax, income on which the Fund pays income
tax is treated as distributed.

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

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

B-32
<PAGE>
A shareholder who acquires shares of the Fund and sells or otherwise disposes
of such shares within 90 days of acquisition may not be allowed to include
certain sales charges incurred in acquiring such shares for purposes of
calculating gain or loss realized upon a sale or exchange of shares of the Fund.

The per share dividends on Class B and Class C shares will generally be lower
than the per share dividends on Class A shares as a result of the higher
distribution-related fee applicable to the Class B and Class C shares. The per
share distributions of net capital gains will be paid in the same amounts for
Class A, Class B and Class C shares. See "Net Asset Value."

Dividends of net investment income and distributions of net short-term capital
gains paid to a shareholder (including a shareholder acting as a nominee or
fiduciary) who is a nonresident alien individual, a foreign corporation or a
foreign partnership (foreign shareholder) are subject to a 30% (or lower treaty
rate) withholding tax upon the gross amount of the dividends unless the
dividends are effectively connected with a U.S. trade or business conducted by
the foreign shareholder. Capital gain dividends paid to a foreign shareholder
are generally not subject to withholding tax. A foreign shareholder will,
however, be required to pay U.S. income tax on any dividends and capital gain
distributions which are effectively connected with a U.S. trade or business of
the foreign shareholder.

Dividends received by corporate shareholders are eligible for a
dividends-received deduction of 70% to the extent the Fund's income is derived
from qualified dividends received by the Fund from domestic corporations.
Interest income, capital gain net income, gain or loss from Section 1256
contracts (described above), dividend income from foreign corporations and
income from other sources will not constitute qualified dividends. Since the
Fund is likely to have a substantial portion of its assets invested in
securities of foreign issuers, the amount of the Fund's dividends eligible for
the corporate dividends-received deduction will be minimal. Individual
shareholders are not eligible for the dividends-received deduction.

Income received by the Fund from sources within foreign countries may be
subject to withholding and other taxes imposed by such countries. Income tax
treaties between certain countries and the United States may reduce or eliminate
such taxes. It is impossible to determine in advance the effective rate of
foreign tax to which the Fund will be subject, since the amount of the Fund's
assets to be invested in various countries will vary.

If the Fund is liable for foreign income taxes, the Fund expects to meet the
requirements of the Internal Revenue Code for "passing-through" to its
shareholders foreign income taxes paid, but there can be no assurance that the
Fund will be able to, or will elect to do so. Shareholders would be required to:
(i) include in gross income (in addition to taxable dividends actually received)
their pro rata share of the foreign income taxes paid by the Fund; and (ii)
treat their pro rata share of foreign income taxes as paid by them. Shareholders
are then permitted either to deduct their pro rata share of foreign income taxes
in computing their taxable income or use it as a foreign tax credit against U.S.
income taxes. No deduction for foreign taxes may be claimed by a shareholder who
does not itemize deductions. Foreign shareholders may not deduct or claim a
credit for foreign tax unless the dividends paid to them by the Fund are
effectively connected with a U.S. trade or business.

Each shareholder will be notified within 60 days after the close of the Fund's
taxable year whether the foreign taxes paid by the Fund will "pass through" for
that year and, if so, such notification will designate (a) the shareholder's
portion of the foreign taxes paid by the Fund and (b) the portion of the
dividend which represents income derived from foreign sources. The tax
consequences to a foreign shareholder entitled to claim the benefits of an
applicable tax treaty may be different from those described herein. Foreign
shareholders are advised to consult their own tax advisers with respect to the
particular tax consequences to them of an investment in the Fund.

The amount of foreign taxes for which a shareholder may claim a credit in any
year will generally be subject to a separate limitation for "passive income,"
which includes, among other things, dividends, interest and certain foreign
currency gains. Gain or loss from the sale of a security or from a Section 988
transaction which is treated as ordinary income or loss (or would

B-33
<PAGE>
have been so treated absent an election by the Fund) will be treated as derived
from sources within the United States, potentially reducing the amount allowable
as a credit under the limitation.

PERFORMANCE INFORMATION

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

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

P (1+T) n = ERV

<TABLE>
<S> <C>
Where: P = a hypothetical initial payment of $1000.
T = average annual total return.
n = number of years.
ERV = ending redeemable value at the end of the 1, 5 or 10 year periods (or
fractional portion thereof) of a hypothetical $1000 payment made at the
beginning of the 1, 5 or 10 year periods.
</TABLE>

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

The average annual total return of the Class A shares for the one year period
ended October 31, 1994 and for the period from July 24, 1992 (commencement of
investment operations) through October 31, 1994 was 1.34% and 24.15%,
respectively, and for the Class B shares, was .79% and 24.98% for Class B
shares, respectively, for the same period. The average annual total return for
Class C shares for the since inception period ended October 31, 1994 was -1.36.

YIELD. The Fund may from time to time advertise its yield as calculated over a
30-day period. Yield is calculated separately for Class A, Class B and Class C
shares. This yield will be computed by dividing the Fund's net investment income
per share earned during this 30-day period by the maximum offering price per
share on the last day of this period. Yield is calculated according to the
following formula:
YIELD = 2[(_a-b_+1)6-1]
cd

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

Yield fluctuates and an annualized yield quotation is not a representation by
the Fund as to what an investment in the Fund will actually yield for any given
period. Yields for the Fund will vary based on a number of factors including
changes in net asset value, market conditions, the level of interest rates and
the level of Fund income and expenses.

B-34
<PAGE>
AGGREGATE TOTAL RETURN. The Fund may also advertise its aggregate total
return. Aggregate total return is determined separately for Class A, Class B and
Class C shares. See "How the Fund Calculates Performance" in the Prospectus.

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

ERV-P
-----
P

<TABLE>
<S> <C>
Where: P = a hypothetical initial payment of $1000.
ERV = ending redeemable value at the end of the 1, 5 or 10 year periods (or
fractional portion thereof) of a hypothetical $1000 payment made at the
beginning of the 1, 5 or 10 year periods.
</TABLE>

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

The aggregate total return for Class A shares for the one year period ended on
October 31, 1994 and for the period from July 24, 1992 (commencement of
operations) to October 31, 1994 was 6.67% and 71.99%, respectively, and for
Class B shares was 5.79% and 68.87%, respectively, for the same period. The
aggregate total return for Class C shares for the since inception period ended
October 31, 1994 was -.36.

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

- ------------
1 Source: Ibbotson Associates, "Stocks, Bonds, Bills and Inflation--1993
Yearbook" (annually updates the work of Roger G. Ibbotson and Rex A.
Sinquefield). Common stock returns are based on the Standard & Poor's 500 Stock
Index, a market-weighted, unmanaged index of 500 common stocks in a variety of
industry sectors. It is a commonly used indicator of broad

B-35
<PAGE>
stock price movements. This chart is for illustrative purposes only, and is not
intended to represent the performance of any particular investment or fund.

CUSTODIAN, TRANSFER AND DIVIDEND DISBURSING AGENT
AND INDEPENDENT ACCOUNTANTS

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

Prudential Mutual Fund Services, Inc. (PMFS), Raritan Plaza One, Edison, New
Jersey 08837, serves as the Transfer and Dividend Disbursing Agent of the Fund.
PMFS is a wholly-owned subsidiary of PMF. PMFS provides customary transfer
agency services to the Fund, including the handling of shareholder
communications, the processing of shareholder transactions, the maintenance of
shareholder account records, payment of dividends and distributions and related
functions. For these services, PMFS receives an annual fee per shareholder
account, a new account set-up fee for each manually established account and a
monthly inactive zero balance account fee per shareholder account. PMFS is also
reimbursed for its out-of-pocket expenses, including, but not limited to,
postage, stationery, printing, allocable communication expenses and other costs.
For the fiscal year ended October 31, 1994, the Fund incurred fees of
approximately $669,000 for such services.

Deloitte & Touche LLP, Two World Financial Center, New York, New York 10281,
serves as the Fund's independent accountants, and in that capacity audits the
Fund's annual reports.

DESCRIPTION OF SECURITY RATINGS

MOODY'S INVESTORS SERVICE

AAA: Bonds which are rated Aaa are judged to be of the best quality. They
carry the smallest degree of investment risk and are generally referred to as
"gilt edge." Interest payments are protected by a large or by an exceptionally
stable margin and principal is secure. While the various protective elements are
likely to change, such changes as can be visualized are most unlikely to impair
the fundamentally strong position of such issues.

AA: Bonds which are rated Aa are judged to be of high quality by all
standards. Together with the Aaa group they comprise what are generally known as
high grade bonds. They are rated lower than Aaa bonds because margins of
protection may not be as large as in Aaa securities or fluctuations of
protective elements may be of greater amplitude or there may be other elements
present which make the long-term risks appear somewhat larger than in Aaa
securities.

B-36
<PAGE>
A: Bonds which are rated A possess many favorable investment attributes and
are to be considered as upper medium grade obligations. Factors giving security
to principal and interest are considered adequate but elements may be present
which suggest a susceptibility to impairment sometime in the future.

BAA: Bonds which are rated Baa are considered as medium grade obligations,
i.e., they are neither highly protected nor poorly secured. Interest payments
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

COMMERCIAL PAPER

Moody's commercial paper ratings are opinions of the ability of issuers to
repay punctually promissory obligations not having an original maturity in
excess of nine months.

P-1: The designation "Prime-1" or "P-1" indicates the highest quality
repayment capacity of the rated issue.

P-2: The designation "Prime-2" or "P-2" indicates a strong capacity for
repayment.

STANDARD & POOR'S RATINGS GROUP

AAA: Debt rated AAA has the highest rating assigned by S&P to a debt
obligation. Capacity to pay interest and repay principal is extremely strong.

AA: Debt rated AA has a very strong capacity to pay interest and repay
principal and differs from the higher rated issues only in small degree.

A: Debt rated A has a strong capacity to pay interest and repay principal
although it is somewhat more susceptible to the adverse effects of changes in
circumstances and economic conditions than debt in higher rated categories.

BBB: Debt rate BBB is regarded as having an adequate capacity to pay interest
and repay principal. Whereas it normally exhibits adequate protection
parameters, adverse economic conditions or changing circumstances are more
likely to lead to a weakened capacity to pay interest and repay principal for
debt in this category than for debt in higher rated categories.

COMMERCIAL PAPER

Standard & Poor's commercial paper ratings are current assessments of the
likelihood of timely payment of debt having an original maturity of no more than
270 days.

A-1: The A-1 designation indicates that the degree of safety regarding timely
payment is very strong.

A-2: Capacity for timely payment on issues with the designation A-2 is strong.
However, the relative degree of safety is not as overwhelming as for
issues designated A-1.

B-37

<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC. Portfolio of Investments
October 31, 1994

<TABLE>
<CAPTION>
Value
Shares Description (Note 1)

<C> <S> <C>
LONG-TERM INVESTMENTS--97.2%
Common Stocks--90.8%
Australia--12.7%
3,655,000 AAPC, Ltd. .............. $ 2,605,459
(Lodging)
2,246,799 Australian National 2,419,124
Industries, Ltd.
(Multi-industry)
950,574 Bank of Melbourne, Ltd. .. 3,063,384
(Financial services)
297,000 Brambles Industries, Ltd.. 2,972,845
(Business & public
services)
787,000 Broken Hill Proprietary
Co., Ltd. ............. 12,073,438
(Energy sources)
3,687,673 BTR Nylex, Ltd. ......... 6,544,495
(Industrial components)
1,483,913 Coca Cola Amatil, Ltd. ... 9,365,981
(Food & household
products)
1,635,000 Nine Network Australia,
Ltd. .................. 4,929,123
(Broadcasting &
publishing)
3,800,500 Sea World Property Trust,
Ltd. .................. 2,963,162
(Leisure & tourism)
1,498,500 West Australia Newspaper,
Ltd. ................... 3,916,745
(Publishing)
3,234,000 Western Mining Corp. 20,147,810
Holdings, Ltd. ------------
(Non-ferrous metals)
71,001,566
------------
Hong Kong--10.7%
2,771,000 Amoy Properties, Ltd. ... 3,442,679
(Real estate)
1,914,000 CITIC Pacific, Ltd. ..... 5,759,090
(Transportation)
2,504,800 Consolidated Electric
Power ................. 5,851,123
(Utilities - electric &
gas)
2,340,600 Guoco Group, Ltd. ....... 11,056,283
(Financial services)
495,604 HSBC Holdings, PLC ...... $ 5,868,741
(Financial services)
12,167,000 Hung Hing Printing Group,
Ltd. ................... 2,629,593
(General manufacturing)
1,982,000 Hutchison Whampoa, Ltd.... 9,157,163
(Multi-industry)
707,000 Jardine Matheson Holdings,
Ltd. ................... 5,878,704
(General trading)
319,300 Liu Chong Hing Bank (New)* 417,358
(Financial services)
3,193,000 Liu Chong Hing Investment,
Ltd.................... 3,904,988
(Real estate)
1,000,000 New World Development Co.,
Ltd. .................. 3,190,112
(Real estate)
18,350,000 Techtronic Industries, 2,588,506
Ltd. .................. ------------
(Machinery &
engineering)
59,744,340
------------
India--0.4%
685,000 Indo Gulf Fertilizer
Industries ............ 2,157,750
(Basic industries) ------------
Indonesia--0.5%
1,863,600 Kabel Metal Industries, 2,682,363
Ltd. .................. ------------
(Wire & cable)
Japan--36.3%
218,000 Acom Co., Ltd. .......... 8,009,082
(Financial services)
392,000 Aiwa Co. ................ 10,679,876
(Consumer electronics)
58,300 Autobacs Seven Co. ...... 7,340,144
(Merchandising)
920 DDI Corp. ............... 8,336,017
(Telecommunications)
693,000 Hino Motors, Ltd. ....... 6,829,876
(Automotive)
31,000 Hirose Electric Co., Ltd.. 1,839,525
(Electronics components
and instruments)
</TABLE>

B-38 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.

<TABLE>
<CAPTION>
Value
Shares Description (Note 1)

<C> <S> <C>
Japan--(cont'd.)
62,400 Japan Associates Finance
Co. ................... $ 9,208,669
(Financial services)
785,000 Kamigumi Co., Ltd. ...... 8,587,203
(Transportation &
warehousing)
211,000 Kato Denki Co. .......... 5,770,382
(Merchandising)
87,000 Keyence Corp. ........... 10,504,644
(Electronics)
43,200 Koei Co. ................ 1,783,282
(Recreation & other
consumer goods)
291,000 Kokusai Securities Co.,
Ltd. .................. 4,834,984
(Financial services)
150,000 Kyocera Corp. ........... 11,424,149
(Public works -
electronics)
1,017,000 Minebea Co. ............. 8,826,594
(Industrial components)
195,100 Murata Manufacturing Co.,
Ltd. ................... 7,973,127
(Electronics)
188,600 Nichiei Co. ............. 12,164,603
(Financial services)
242,400 Nissen Co., Ltd. ........ 9,906,130
(Merchandising)
1,153,000 Nisshin Steel Co. ....... 6,056,521
(Metals)
257,000 Rohm Co., Ltd. .......... 11,271,930
(Financial services)
106,000 Secom Co., Ltd. ......... 7,022,910
(Security/investigation
services)
440,000 Shin-Etsu Chemical Co.,
Ltd. .................. 9,353,973
(Chemicals)
151,500 Sony Corp. .............. 8,583,436
(Entertainment)
1,100,000 Sumitomo Chemical, Co. ... 6,493,291
(Chemicals)
285,000 Suzuki Motor Corp., Ltd... 3,617,647
(Automotive)
342,000 Tokyo Electronic Co., Ltd. $ 11,435,294
(Electronics)
55,000 Tsutsumi Jewelry Co., Ltd. 5,199,174
(Merchandising) ------------
203,052,463
------------
Korea--4.6%
60,160 Daewoo Securities Co.,
Ltd. .................. 2,679,144
(Financial services)
15,405 Daishin Securities Co. ... 343,987
(Financial services)
37,600 Dong Ah Construction 1,410,324
Industry Co., Ltd. ....
(Construction & housing)
119,814 Hanjin Heavy Industries*.. 1,893,817
(Shipbuilding)
46,000 Hanyang Chemical, Corp.... 1,304,146
(Chemicals)
37,400 Lucky Co., Ltd.* ........ 1,252,688
(Chemicals)
3,000 Mando Machinery Corp.* ... 195,697
(Automotive parts)
9,500 Pohang Iron & Steel Co.,
Ltd.* ................. 899,768
(Metals)
3,673 Samsung Electronics Co. 615,123
(New)*
(Electronics)
69,673 Samsung Electronics Co. .. 11,904,237
(Electronics)
5,860 Shinsegae, Co.* ......... 707,184
(Merchandising)
44,540 Shinwon Corp.* .......... 2,307,598
(Textiles & apparel)
4,602 Shinyoung Wacoal* ....... 147,213
(Financial services) ------------
25,660,926
------------
</TABLE>

B-39 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.

<TABLE>
<CAPTION>
Value
Shares Description (Note 1)

<C> <S> <C>
Malaysia--9.6%
350,000 Berjaya South Island $ 3,834,866
Berhad* ...............
(Textiles and apparel)
1,000 Dunlop Estates Berhad ... 3,267
(Miscellaneous services)
643,000 Genting Berhad .......... 5,912,933
(Financial services)
478,000 Hong Leong Industries
Berhad ................ 2,562,551
(Building & related
industries)
1,000 Kedah Cement Holdings
Berhad ................ 1,503
(Building materials)
892,400 Malaysian Helicopter, Co.. 2,200,007
(Transportation)
368,000 Pacific Chemical Berhad .. 2,232,048
(Chemicals)
1,500 Pilecon Engineering Berhad 2,489
(Machinery &
engineering)
7,771,000 Renong Berhad ........... 12,163,566
(Infrastructure)
2,048,000 Resorts World Holdings ... 12,982,821
(Leisure & tourism)
2,454,000 Technology Resources
Industries Berhad* .... 9,554,801
(Data processing &
reproduction)
810,000 Time Engineering Berhad 2,408,921
....................... ------------
(Engineering)
53,859,773
------------
New Zealand--2.5%
4,720,500 Fletcher Challenge, Ltd... 12,733,199
(Forest products &
paper)
1,100,000 Fletcher Forestry, Ltd. 1,456,487
....................... ------------
(Forest products &
paper)
14,189,686
------------
Singapore--12.2%
1,123,750 First Capital Corp. ..... 4,439,883
(Construction)
316,000 Fraser & Neave, Ltd. .... $ 3,745,504
(Beverages & tobacco)
1,587,000 Hong Leong Finance, Ltd... 6,053,950
(Financial services)
183,000 Kim Eng Holdings, Ltd. ... 228,127
(Financial services)
1,265,000 Overseas Union Bank ..... 7,238,419
(Financial services)
1,329,750 Sembawang Maritime, Ltd... 6,386,060
(Transportation)
943,000 Singapore Airlines, Ltd... 9,057,424
(Transportation)
1,209,000 United Overseas Bank, Ltd. 13,259,468
(Financial services)
970,000 Van Der Horst, Ltd.* .... 4,361,035
(Machinery &
engineering)
6,618,000 Wing Tai Holdings ....... 13,524,518
(Conglomerates) ------------
68,294,388
------------
Thailand--1.3%
157,801 Land & House Public Co.,
Ltd. .................. 3,241,749
(Construction & housing)
1,370,000 Sahavirya Steel Industry* 3,435,581
(Metals)
103,400 Srithai Superware Co. ... 576,680
(Food & household ------------
products)
7,254,010
------------
Total common stocks
(cost $444,134,703)..... 507,897,265
------------
Preferred Stocks--1.4%
Australia--0.1%
63,635 Bank of Melbourne, Ltd. 595,378
....................... ------------
(Financial services)
</TABLE>

B-40 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.

<TABLE>
<CAPTION>
Value
Shares Description (Note 1)

<C> <S> <C>
Preferred Stocks--(cont'd.)
Korea--1.3%
76,530 Daewoo Securities Co.,
Ltd. .................. $ 1,948,892
(Financial services)
106,890 Daishin Securities Co. ... 1,542,037
(Financial services)
30,450 Mando Machinery Corp. ... 1,145,957
(Automotive)
28,354 Samsung Electronics Co. 2,667,691
....................... ------------
(Electronics)
7,304,577
------------
Total preferred stocks
(cost $9,019,435)....... 7,899,955
------------
Depository Receipts--1.3%
Indonesia--0.5%
67,200 PT Indonesia Satellite* .. 2,637,600
(Telecommunications)
Korea--0.8%
145,400 Pohang Iron & Steel Co., 4,780,025
Ltd.* ................. ------------
(Metals)
Total depository receipts
(cost $7,463,672)....... 7,417,625
------------
Convertible Loan Stocks--1.3%
Malaysia--1.1%
1,809,000 IJM Corp. Berhad ........ 5,220,651
(Construction & housing)
239,000 Time Engineering Berhad 710,781
....................... ------------
(Engineering)
5,931,432
------------
Singapore--0.2%
329,800 Kim Eng Holdings Ltd.* .. 207,810
(Financial services)
631,000 Sembawang Maritime, Ltd. 988,624
....................... ------------
(Transportation)
1,196,434
------------
Total convertible loan
stocks
(cost $3,731,237)....... $ 7,127,866
------------
Warrants*--0.9%
Australia--.01%
West Australian Newspaper,
Ltd.
214,071 expiring June '99 @ A$5.00 79,479
------------
(Publishing)
Japan--0.6%
Autobacs Seven Co.
150 expiring Feb. '95 @
(YEN)7,345.............. 648,750
150 expiring Mar. '96 @ 605,625
(YEN)7,483 ............
(Merchandising)
Kamigumi Co., Ltd.
300 expiring Sept. '96 @ 54,250
(YEN)896 ..............
(Transportation)
Nissen Co., Ltd.
493 expiring Nov. '96 @ 655,520
(YEN)1,385 ............
(Merchandising)
Nitori Co.
10,250 expiring Feb. '98 1,608,003
@(YEN)3,268 ........... ------------
(Merchandising)
3,572,148
------------
Malaysia--0.1%
Multi-Purpose Holdings
Berhad
187,000 expiring May '99 @ MYR4.00 172,694
(Consumer goods)
Pilecon Engineering Berhad
944,832 expiring July '99 @ 628,532
MYR4.22 ------------
(Machinery &
engineering)
801,226
------------
Singapore--0.1%
Hong Leong Finance, Ltd.
190,200 expiring Nov. '98 @ 243,580
SGD3.25
(Financial services)
</TABLE>

B-41 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.

<TABLE>
<CAPTION>
Value
Warrants Description (Note 1)

<C> <S> <C>
Singapore--(cont'd.)
Kim Eng Holdings, Ltd.*
392,400 expiring Feb. '97 @ $ 227,207
SGD1.00
(Financial services)
Singapore Finance
144,300 expiring June '99 @ 143,514
SGD1.50 ------------
(Financial services)
614,301
------------
Total warrants
(cost $3,353,163)....... 5,067,154
------------

<CAPTION>
Principal
Amount
(000) Convertible Bonds--1.5%
- ----------
<C> <S> <C>
India--1.0%
Gujarat Ambuja Cement
US$ 3,000 3.50%, 6/30/99 .......... 5,355,000
(Building materials) ------------
Thailand--0.5%
MDX Public Co.
3,864 4.75%, 9/17/03 .......... 3,178,140
(Real estate) ------------
Total convertible bonds
(cost $8,407,590)....... 8,533,140
------------
Total long-term
investments
(cost $476,109,800)..... 543,943,005
------------
SHORT-TERM INVESTMENTS--1.5%
Repurchase Agreement
Joint Repurchase Agreement Account,
8,450 4.77%, 11/1/94 (Note 5)
(cost $8,450,000)....... 8,450,000
------------
Total Investments--98.7%
(cost $484,559,800; Note
4)...................... 552,393,005
Other assets in excess of
liabilities--1.3%....... 7,194,839
------------
Net Assets--100%.......... $559,587,844
------------
------------
</TABLE>

- ------------
* Non-income producing security.
B-42 See Notes to Financial Statements.

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Assets and Liabilities

<TABLE>
<CAPTION>
October 31,
Assets 1994
------------
<S> <C>
Investments, at value (cost $484,559,800)................................................ $552,393,005
Foreign currency (cost $11,186,851)...................................................... 11,205,084
Receivable for investments sold.......................................................... 11,500,469
Receivable for Fund shares sold.......................................................... 1,453,155
Dividends and interest receivable........................................................ 439,061
Deferred expenses and other assets....................................................... 114,060
------------
Total assets......................................................................... 577,104,834
------------
Liabilities
Payable for investments purchased........................................................ 10,141,883
Payable for Fund shares reacquired....................................................... 4,914,400
Forward contracts--amount payable to counterparty........................................ 1,069,235
Accrued expenses and other liabilities................................................... 479,799
Distribution fee payable................................................................. 408,492
Management fee payable................................................................... 352,871
Deferred Thailand capital gains tax liability............................................ 150,310
------------
Total liabilities.................................................................... 17,516,990
------------
Net Assets............................................................................... $559,587,844
------------
------------
Net assets were comprised of:
Common stock, at par................................................................... $ 33,570
Paid-in capital in excess of par....................................................... 488,364,012
------------
488,397,582
Accumulated net realized gain on investments and foreign currency transactions......... 4,566,897
Net unrealized appreciation on investments and foreign currencies...................... 66,623,365
------------
Net assets, October 31 ,1994........................................................... $559,587,844
------------
------------
Class A:
Net asset value and redemption price per share
($98,920,598 / 5,854,538 shares of common stock issued and outstanding).............. $16.90
Maximum sales charge (5% of offering price)............................................ .89
------------
Maximum offering price to public....................................................... $17.79
------------
------------
Class B:
Net asset value, offering price and redemption price per share
($459,949,480 / 27,672,102 shares of common stock issued and outstanding)............ $16.62
------------
------------
Class C:
Net asset value, offering price and redemption price per share
($717,766 / 43,185 shares of common stock issued and outstanding).................... $16.62
------------
------------
</TABLE>

See Notes to Financial Statements.
B-43
<PAGE>
PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Operations

<TABLE>
<CAPTION>
Year Ended
October 31,
Net Investment Income 1994
----------------
<S> <C>
Income
Dividends (net of foreign
withholding taxes of
$576,714)....................... $ 4,835,029
Interest (net of foreign
withholding taxes of $1,868).... 433,687
----------------
Total income.................... 5,268,716
----------------
Expenses
Management fee.................... 3,726,394
Distribution fee--Class A......... 224,701
Distribution fee--Class B......... 4,045,063
Distribution fee--Class C......... 1,128
Custodian's fees and expenses..... 1,357,000
Transfer agent's fees and
expenses.......................... 787,000
Reports to shareholders........... 292,000
Registration fees................. 267,000
Directors' fees................... 42,000
Amortization of organization
expense........................... 40,000
Legal fees........................ 40,000
Audit fee......................... 38,000
Miscellaneous..................... 30,541
----------------
Total expenses.................. 10,890,827
----------------
Net investment loss................. (5,622,111)
----------------
Realized and Unrealized Gain (Loss)
on Investment and Foreign Currency
Transactions
Net realized gain (loss) on:
Investment transactions (net of
Thailand capital gains tax of
$303,601)....................... 3,587,932
Foreign currency transactions..... (595,516)
----------------
2,992,416
----------------
Net change in unrealized
appreciation/depreciation on:
Investments (net of deferred
Thailand capital gains tax of
$150,310)......................... 25,885,899
Foreign currencies................ (1,856,866)
----------------
24,029,033
----------------
Net gain on investments and
foreign currencies.............. 27,021,449
----------------
Net Increase in Net Assets
Resulting from Operations........... $ 21,399,338
----------------
----------------
</TABLE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.
Statement of Changes in Net Assets

<TABLE>
<CAPTION>
Year Ended October 31,
Increase (Decrease) -----------------------------------
in Net Assets 1994 1993
---------------- ----------------
<S> <C> <C>
Operations
Net investment loss... $ (5,622,111) $ (633,024)
Net realized gain on
investment and
foreign currency
transactions........ 2,992,416 5,416,787
Net change in
unrealized
appreciation on
investments and
foreign
currencies.......... 24,029,033 40,695,258
---------------- ----------------
Net increase in net
assets resulting
from operations..... 21,399,338 45,479,021
---------------- ----------------
Distributions in excess
of net investment
income (Note 1)
Class A............... (293,320) (19,787)
Class B............... (658,425) (31,474)
---------------- ----------------
(951,745) (51,261)
---------------- ----------------
Distributions to
shareholders from net
realized gains
Class A............... (944,124) --
Class B............... (3,989,283) --
---------------- ----------------
(4,933,407) --
---------------- ----------------
Fund share transactions
(Note 6)
Net proceeds from
shares sold......... 520,354,132 270,394,550
Net asset value of
shares
issued to
shareholders
in reinvestment of
distributions....... 5,612,542 47,105
Cost of shares
reacquired............ (297,243,493) (34,486,434)
---------------- ----------------
Net increase in net
assets from Fund
share
transactions........ 228,723,181 235,955,221
---------------- ----------------
Total increase.......... 244,237,367 281,382,981
Net Assets
Beginning of year....... 315,350,477 33,967,496
---------------- ----------------
End of year............. $ 559,587,844 $ 315,350,477
---------------- ----------------
---------------- ----------------
</TABLE>

See Notes to Financial Statements. See Notes to Financial Statements.

B-44
<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.
Notes to Financial Statements

Note 1. Accounting The following is a summary
Policies of significant accounting poli-
cies followed by the Fund in the preparation of
its financial statements.
Securities Valuation: Securities traded on an exchange (whether domestic or
foreign) are valued at the last reported sales price on the primary exchange on
which they are traded. Securities traded in the over-the-counter market
(including securities listed on exchanges for which a last sales price is not
available) are valued at the average of the last reported bid and asked prices.
Any securities or other assets for which current market quotations are not
readily available are valued at fair value as determined in good faith under
procedures established by and under the general supervision and responsibility
of the Fund's Board of Directors. No such securities were held by the Fund at
October 31, 1994.
Short-term securities which mature in more than 60 days are valued at current
market quotations. Short-term securities which mature in 60 days or less are
valued at amortized cost.
In connection with transactions in repurchase agreements with U.S. financial
institutions, it is the Fund's policy that its custodian or designated
subcustodians, as the case may be under triparty repurchase agreements, takes
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.
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 closing rates of exchange;
(ii) purchases and sales of investment securities, income and expenses--at
the rate 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 fiscal 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 fiscal 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 long-term debt
securities sold during the fiscal year. Accordingly, realized foreign currrency
gains (losses) are included in the reported net realized gains on investment
transactions.
Net realized losses on foreign currency transactions of $595,516 represent
net foreign exchange losses from forward currency contracts, disposition of
foreign currencies, currency gains or losses realized between the trade and
settlement dates on security transactions, and the difference between the
amounts of interest, dividends and foreign 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 fiscal year end exchange rates are reflected as a component of
unrealized appreciation 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: 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. A forward contract is a commitment to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the settlement value of the original
and renegotiated forward contract, if any, is isolated and is
B-45
<PAGE>
included in net realized gains from 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 Investment Income: Securities transactions are
recorded on the trade date. Realized gains and losses from investment and
foreign currency transactions are calculated on the identified cost basis.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis.
Net investment income or loss (other than distribution fees) and unrealized
and realized gains or losses are allocated daily to each class of shares of the
Fund based upon the relative proportion of net assets of each class at the
beginning of the day.
Dividends and Distributions: The Fund expects to pay dividends of net investment
income and distributions of net realized capital and currency gains, if any,
annually. 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 due to timing differences concerning recognition of
income.
Taxes: It is the Fund's policy to meet the requirements of the Internal Revenue
Code applicable to regulated investment companies and to distribute all of its
taxable income to shareholders. Therefore, no federal income tax provision is
required.
Withholding taxes on foreign dividends, interest and capital gains have been
provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates.
Deferred Organization Expenses: Approximately $200,000 of organization and
initial registration costs have been deferred and are being amortized over the
period of benefit not to exceed 60 months from the date the Fund commenced
investment operations.
Reclassification of Capital Accounts: The Fund accounts for and reports
distributions to shareholders in accordance with the A.I.C.P.A.'s Statement of
Position 93-2: Determination, Disclosure, and Financial Statement Presentation
of Income, Capital Gain, and Return of Capital Distributions by Investment
Companies. As a result of this statement, the Fund changed the classification of
distributions to shareholders to better disclose the differences between
financial statement amounts and distributions determined in accordance with
income tax regulations. The effect caused by applying this statement was to
decrease accumulated net investment loss by $6,573,856 for current fiscal year
net operating losses and distributions in excess of book basis net investment
income and to increase accumulated net realized gain on investments and foreign
currency transactions by $1,768,094 for certain items which are classified
differently for book and tax purposes and to decrease paid-in capital in excess
of par by $8,341,950 with respect to amounts reported through October 31, 1994.
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 PMF. Pursuant to this agreement,
PMF has responsibility for all investment advisory services and supervises the
subadviser's performance of such services. PMF has entered into a subadvisory
agreement with The Prudential Investment Corporation (``PIC''); PIC furnishes
investment advisory services in connection with the management of the Fund. PMF
pays for the cost of the subadviser's services, the compensation of officers of
the Fund, occupancy and certain clerical and bookkeeping costs of the Fund. The
Fund bears all other costs and expenses.
The management fee paid PMF is computed daily and payable monthly at an
annual rate of .75 of 1% of the average daily net assets of the Fund.
The Fund has distribution agreements with Prudential Mutual Fund
Distributors, Inc. (``PMFD''), which acts as the distributor of the Class A
shares of the Fund, and Prudential Securities Incorporated (``PSI''), which acts
as distributor of the Class B shares and Class C shares of the Fund
(collectively the ``Distributors''). The Fund compensates the Distributors for
distributing and servicing the Fund's Class A, Class B and Class C shares,
pursuant to plans of distribution, (the ``Class A, B and C Plans'') regardless
of expenses actually incurred by them. The distribution fees are accrued daily
and payable monthly.
On July 19, 1994, shareholders of the Fund approved amendments to the Class A
and Class B Plans under which the distribution plans became compensation plans,
effective August 1, 1994. Prior thereto, the distribution plans were
reimbursement plans, under which PMFD and PSI were reimbursed for expenses
actually incurred by them up to the amount permitted under the Class A and Class
B Plans, respectively. The Fund is not obligated to pay any prior or future
excess distribution costs (costs incurred by the Distributors in excess of
distribution fees paid by the Fund or contingent deferred sales charges received
by the Distributors). The rate of the distribution fees charged to Class A and
Class B shares of the Fund did not change under the amended plans of
distribution. The Fund began offering Class C shares on August 1, 1994.
B-46

<PAGE>
Pursuant to the Class A, B and C Plans, the Fund compensates the Distributors
for distribution-related activities at an annual rate of up to .30 of 1%, 1% and
1%, of the average daily net assets of the Class A, B and C shares,
respectively. Such expenses under the Class A plan were assessed at an average
rate of .24 of 1% of the average daily net assets of the Class A shares for the
fiscal year ended October 31, 1994. Currently, the Class A Plan distribution
expenses are .25 of 1% of the average daily net assets. Such expenses under the
Class B and Class C Plans were 1% of the average daily net assets of both the
Class B and Class C shares for the fiscal year ended October 31, 1994.
PMFD has advised the Fund that it has received approximately $1,380,600 in
front-end sales charges resulting from sales of Class A shares during the fiscal
year ended October 31, 1994. From these fees, PMFD paid such sales charges to
PSI and Pruco Securities Corporation, affiliated broker-dealers, which in turn
paid commissions to salespersons and incurred other distribution costs.
PSI has advised the Fund that for the fiscal year ended October 31, 1994, it
received approximately $1,080,500 in contingent deferred sales charges imposed
upon certain redemptions by Class B shareholders.
PMFD is a wholly-owned subsidiary of PMF; PSI, PMF and PIC are (indirect)
wholly-owned subsidiaries of The Prudential Insurance Company of America
(``Prudential'').

Note 3. Other Prudential Mutual Fund Ser-
Transactions vices, Inc. (``PMFS''), a
With Affiliates wholly owned subsidiary of
PMF, serves as the Fund's transfer agent. During
the year ended October 31, 1994, the Fund incurred fees of approximately
$669,000 for the services of PMFS. As of October 31, 1994, approximately $64,000
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 non-affiliates.

Note 4. Portfolio Purchases and sales of invest-
Securities ment securities, other than
short-term investments, for the year ended October
31, 1994 were $488,590,939 and $261,235,158, respectively.
The United States federal income tax basis of the Fund's investments at
October 31, 1994 was $490,115,443 and accordingly, net unrealized appreciation
for federal income tax purposes was $62,277,562 (gross unrealized
appreciation--$82,287,284; gross unrealized depreciation--$20,009,722).
At October 31, 1994, the Fund had an outstanding forward currency contracts
to sell foreign currencies as follows:

<TABLE>
<CAPTION>
Value at
Foreign Currency Settlement Date Current
Sale Contract Receivable Value Depreciation
- --------------------- --------------- ----------- --------------
<S> <C> <C> <C>
Japanese Yen,
expiring 2/16/95... $ 20,000,000 $21,069,235 $ 1,069,235
--------------- ----------- --------------
--------------- ----------- --------------
</TABLE>

Note 5. Joint The Fund, along with other
Repurchase affiliated registered invest-
Agreement Account ment 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. At October 31, 1994, the Fund had a .94% undivided interest in the
repurchase agreements in the joint account. The undivided interest for the Fund
represented $8,450,000 in principal amount. As of such date, each repurchase
agreement in the joint account and the value of the collateral therefor were as
follows:
Smith Barney, Inc., 4.80%, in the principal amount of $260,000,000,
repurchase price $260,034,667, due 11/1/94. The value of the collateral
including accrued interest is $265,200,122.
Nomura Securities International, Inc., 4.77%, in the principal amount of
$100,000,000, repurchase price $100,013,250, due 11/1/94. The value of the
collateral including accrued interest is $102,000,391.
Goldman, Sachs & Co., 4.75%, in the principal amount of $275,000,000,
repurchase price $275,036,285, due 11/1/94. The value of the collateral
including accrued interest is $280,500,611.
CS First Boston Corp., 4.75%, in the principal amount of $265,000,000,
repurchase price $265,034,965, due 11/1/94. The value of the collateral
including accrued interest is $271,053,272.

Note 6. Capital The Fund offers Class A,
Class B and Class C shares. Class A shares are
sold with a front-end sales charge of up to 5%. Class B shares are sold with a
contingent deferred sales charge which declines from 5% to zero depending on the
period of time the shares are held. Class C shares are sold with a contingent
deferred sales charge of 1% during the first year. Class B shares will
automatically convert to Class A shares on a quarterly basis approximately seven
years after purchase commencing on or about February 1995.
The Fund has authorized 2 billion shares of common stock at $.001 par value
per share equally divided into three classes, designated Class A, Class B and
Class C common
B-47
<PAGE>
stock. Of the 33,569,825 shares of common stock issued and outstanding at
October 1994, PMF owned 5,000 Class A shares and 5,000 Class B shares and
Prudential owned 210,522 Class A shares.
Transactions in shares of common stock for the years ended October 31, 1994
and 1993 were as follows:

Class A Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended October 31, 1994:
Shares sold................... 8,481,016 $ 142,276,687
Shares issued in reinvestment
of distributions............ 68,502 1,139,181
Shares reacquired............. (6,691,379) (112,537,168)
----------- -------------
Net increase in shares
outstanding................. 1,858,139 $ 30,878,700
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 3,564,128 $ 51,357,221
Shares issued in reinvestment
of distributions............ 1,727 17,942
Shares reacquired............. (876,093) (12,582,153)
----------- -------------
Net increase in shares
outstanding................. 2,689,762 $ 38,793,010
----------- -------------
----------- -------------
<CAPTION>
Class B Shares Amount
- ------------------------------ ----------- -------------
<S> <C> <C>
Year ended October 31, 1994:
Shares sold................... 22,664,100 $ 375,017,028
Shares issued in reinvestment
of distributions............ 271,772 4,473,361
Shares reacquired............. (11,011,611) (182,353,187)
----------- -------------
Net increase in shares
outstanding................. 11,924,261 $ 197,137,202
----------- -------------
----------- -------------
Year ended October 31, 1993:
Shares sold................... 15,458,343 $ 219,037,329
Shares issued in reinvestment
of distributions............ 2,818 29,163
Shares reacquired............. (1,599,655) (21,904,281)
----------- -------------
Net increase in shares
outstanding................. 13,861,506 $ 197,162,211
----------- -------------
----------- -------------
<CAPTION>
Class C
- ------------------------------
<S> <C> <C>
August 1, 1994 through
October 31, 1994*
Shares sold................... 183,643 $ 3,060,417
Shares reacquired............. (140,458) (2,353,138)
----------- -------------
Net increase in shares
outstanding................. 43,185 $ 707,279
----------- -------------
----------- -------------
</TABLE>

- ------------
* Commencement of offering of Class C shares.

Note 7. Capital On December 1, 1994, the
Gain Distribution Board of Directors of the
Fund announced a distribution of long-term capital
gains of $.1025 per share payable to Class A, B and C shares on December 15,
1994 to shareholders of record on December 8, 1994.
B-48

<PAGE>

PRUDENTIAL PACIFIC GROWTH FUND, INC.
Financial Highlights

<TABLE>
<CAPTION>
Class A Class B Class C
----------------------------------------- ----------------------------------------- -----------
July 24, July 24, August 1,
1992* 1992* 1994@
Year Ended October 31, Through Year Ended October 31, Through Through
------------------------- October 31, ------------------------- October 31, October 31,
1994(D) 1993(D) 1992 1994(D) 1993(D) 1992 1994(D)
---------- ---------- ----------- ---------- ---------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE:
Net asset value,
beginning of
period............. $ 16.10 $ 10.65 $ 10.00 $ 15.94 $ 10.63 $ 10.00 $ 16.68
---------- ---------- ----------- ---------- ---------- ----------- -----------
Income from
investment
operations
Net investment
loss............... (.08) (.01) (.02) (.21) (.10) (.04) (.06)
Net realized and
unrealized gains on
investment and
foreign currency
transactions....... 1.15 5.48 .67 1.13 5.43 .67 --
---------- ---------- ----------- ---------- ---------- ----------- -----------
Total from
investment
operations....... 1.07 5.47 .65 .92 5.33 .63 (.06)
---------- ---------- ----------- ---------- ---------- ----------- -----------
Less distributions
Distributions in
excess of net
investment
income............. (.06) (.02) -- (.03) (.02) -- --
Distributions from
net realized
gains.............. (.21) -- -- (.21) -- -- --
---------- ---------- ----------- ---------- ---------- ----------- -----------
Total
distributions.... (.27) (.02) -- (.24) (.02) -- --
---------- ---------- ----------- ---------- ---------- ----------- -----------
Net asset value, end
of period.......... $ 16.90 $ 16.10 $ 10.65 $ 16.62 $ 15.94 $ 10.63 $ 16.62
---------- ---------- ----------- ---------- ---------- ----------- -----------
---------- ---------- ----------- ---------- ---------- ----------- -----------
TOTAL RETURN#........ 6.67% 51.39% 6.50% 5.79% 50.17% 6.30% (.36)%
RATIOS/SUPPLEMENTAL
DATA:
Net assets, end of
period (000)....... $ 98,921 $ 64,353 $ 13,918 $ 459,949 $ 250,997 $ 20,050 $ 718
Average net assets
(000).............. $ 92,233 $ 26,264 $ 12,884 $ 404,506 $ 74,590 $ 16,025 $ 458
Ratios to average net
assets:##
Expenses, including
distribution
fees............. 1.57% 1.63% 2.72%** 2.33% 2.37% 3.52%** 3.00%**
Expenses, excluding
distribution
fees............. 1.33% 1.43% 2.52%** 1.33% 1.37% 2.52%** 2.00%**
Net investment
loss............. (.50)% (.04)% (.75)%** (1.27)% (.83)% (1.55)%** (1.64)%**
Portfolio turnover... 56% 44% %0 56% 44% %0 56%

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

See Notes to Financial Statements.
B-49

<PAGE>
INDEPENDENT AUDITORS' REPORT

The Shareholders and Board of Directors
Prudential Pacific Growth Fund, Inc.

We have audited the accompanying statement of assets and liabilities of
Prudential Pacific Growth Fund, Inc., including the portfolio of investments,
as of October 31, 1994, the related statements of operations for the year then
ended and of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the two years in the period
then ended and the period July 24, 1992 (commencement of investment operations)
to October 31, 1992. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express
an opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of the securities owned as of
October 31, 1994 by correspondence with the custodian and brokers; where
replies were not received from brokers, we performed other auditing procedures.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements and financial highlights present
fairly, in all material respects, the financial position of Prudential Pacific
Growth Fund, Inc. as of October 31, 1994, the results of its operations, the
changes in its net assets, and its financial highlights for the respective
stated periods, in conformity with generally accepted accounting principles.

Deloitte & Touche LLP
New York, New York
December 16, 1994

B-50

<PAGE>

PRUDENTIAL MUTUAL FUNDS
Supplement dated August 1, 1995

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

MANAGER

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

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

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

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

SHAREHOLDER INVESTMENT ACCOUNT

Mutual Fund Programs

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

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

APPENDIX--GENERAL INVESTMENT INFORMATION

The following terms are used in mutual fund investing.

Asset Allocation

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

Diversification

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

Duration

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

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

Market Timing

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

Power of Compounding

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

<PAGE>

APPENDIX--PORTFOLIO MANAGERS

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

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

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

Prudential Equity Fund, Inc.

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

Prudential Equity Income Fund

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

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

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

Prudential Utility Fund, Inc.

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

<PAGE>

APPENDIX--HISTORICAL PERFORMANCE DATA

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

This chart shows the long-term performance of various asset classes and the
rate of inflation.

___________________________________________________________________________

EACH INVESTMENT PROVIDES A DIFFERENT OPPORTUNITY
(Value of $1 invested on 12/31/25)

[GRAPH]

___________________________________________________________________________

Source: Stocks, Bonds, Bills, and Inflation 1995 Yearbook, Ibbotson
Associates, Chicago (annually updates work by Roger G. Ibbotson and Rex A.
Sinquefield). Used with permission. All rights reserved. This chart is
for illustrative purposes only and is not indicative of the past, present,
or future performance of any asset class or any Prudential Mutual Fund.

Generally, stock returns are attributable to capital appreciation and the
reinvestment of distributions. Bond returns are attributable mainly to the
reinvestment of distributions. Also, stock prices are usually more volatile
than bond prices over the long-terms.

Small stock returns for 1926-1989 are those of stocks comprising the
5th quintile of the New York Stock Exchange. Thereafter, returns are those
of the Dimensional Fund Advisors (DFA) Small Company Fund. Common stock
returns are based on the S&P Composite Index, a market-weighted, unmanaged
index of 500 stocks (currently) in a variety of industries. It is often
used as a broad measure of stock market performance.

Long-terms government bond returns are represented by a portfolio that
contains only one bond with a maturity of roughly 20 years. At the
beginning of each year a new bond with a then-current coupon replaces the
old bond. Treasury bill returns are for a one month bill. Treasuries are
guaranteed by the government as to the timely payment of principal and
interest; equities are not. Inflation is measured by the consumer price
index (CPI).

Impact of Inflation. The "real" rate of investment return is that which
exceeds the rate of inflation, the percentage change in the value of
consumer goods and the general cost of living . A common goal of long-term
investors is to outpace the erosive impact of inflation on investment
returns.

<PAGE>

Set forth below is a historical performance data relating to various
sectors of the fixed-income securities markets. The chart shows the
historical total returns of U.S. Treasury bonds, U.S. Mortgage securities,
U.S. corporate bonds, U.S. high yield bonds and world government bonds on an
annual basis from 1987 to May 1995. The total returns of the indices include
accrued interest, plus the price changes (gains or losses) of the underlying
securities during the period mentioned. The data is provided to illustrate
the varying historical total returns and investors should not consider this
performance data as an indication of the future performance of the Fund or
of any sector in which the Fund invests.

All information relies on data obtained from statistical services,
reports and other services believed by the Manager to be reliable. Such
information has not been verified. The figures do not reflect the
operating expenses and fees of a mutual fund. See "Fund Expenses" in the
prospectus. The net effect of the deduction of the operating expenses of a
mutual fund on these historical total returns, including the compounded
effect over time, could be substantial.

Historical Total Returns of Different Bond Market Sectors

YTD
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
'87 '88 '89 '90 '91 '92 '93 '94 5/95

U.S. Government
Treasury Bonds1 2.0% 7.0% 14.4% 8.5% 15.3% 7.2% 10.7% (3.4)% 10.3%

U.S. Government
Mortgage
Securities2 4.3% 8.7% 15.4% 10.7% 15.7% 7.0% 6.8% (1.6)% 10.1%
U.S. Investment
Grade Corporate
Bonds3 2.6% 9.2% 14.1% 7.1% 18.5% 8.7% 12.2% (3.9)% 12.8%

U.S. High Yield
Corporate Bonds4 5.0% 12.5% 0.8% (9.6)% 46.2% 15.8% 17.1% (1.0)% 11.7%

World Government
Bonds5 35.2% 2.3% (3.4)% 15.3% 16.2% 4.8% 15.1% 6.0% 19.4%

Difference between
highest and lowest
return percent 33.2 10.2 18.8 24.9 30.9 11.0 10.3 9.9 9.3

</TABLE>

1 Lehman Brother Treasury Bond Index is an unmanaged index made up of over
150 public issues of the U.S. Treasury having maturities of at least one
year.

2 Lehman Brother Mortgage-Backed Securities Index is an unmanaged index
that includes over 600 15- and 30-year fixed-rate mortgage-backed
securities of the Government National Mortgage Association (GNMA), Federal
National Mortgage Association (FNMA), and the Federal Home Lona Mortgage
Corporation (FHLMC).

3 Lehman Brother Corporate Bond Index includes over 3,000 public fixed-
rate, nonconvertible bonds. All bonds are U.S. dollar-denominated issues
and include debt issued or guaranteed by foreign sovereign governments,
municipalities, governmental agencies or international agencies. All bonds
in the index have maturities of at least one year.

4 Lehman Brothers High Yield Bond Index is an unmanaged index comprising
over 750 public, fixed-rate, nonconvertible bonds that are rated Ba1 or
lower by Moody's Investors Service (or rated BB+ or lower by Standard &
Poor's or Fitch Investors Service). All bonds in the index have maturities
of at least one year.

5 Salomon Brothers World Government Index (Non U.S.) includes over 800
bonds issued by various foreign governments or agencies, excluding those in
the U.S., but including those in Japan, Germany, France, the U.K., Canada,
Italy, Australia, Belgium, Denmark, the Netherlands Spain, Sweden, and
Austria. All bonds in the index have maturities of at lease one year.

<PAGE>

This chart illustrates the This chart shows the growth of a
performance of major world stock hypothetical $10,000 investment
markets for the period from 1985 made in the stocks representing the
through 1994. It does not S&P 500 stock index with and
represent the performance of any without reinvested dividends.
Prudential Mutual Fund
___________________________________
Average Annual Total Returns of
Major World Stock Markets (1985-
1194) (in U.S. dollars)

___________________________________ [GRAPH]

[GRAPH]

___________________________________ ___________________________________

Source: Morgan Stanley Capital Source: Stocks, Bonds, Bills and
International (MSCI) and Lipper inflation 1995 Yearbook, Ibbotson
Analytical New Applications. Used Associate, Chicago (annually
with permission. Morgan Stanley updates word by Roger G. Ibbotson
Country indices are unmanaged and Rex A. Sinquefield). Used with
indices which include those stock permission. All rights reserved.
making up the largest two-thirds of This chart is used for illustrative
each country's total stock market purposes only and is not intended
capitalization. Returns reflect to represent the past, present, or
the reinvestment of all future performance of any
distributions. This Chart is for Prudential Mutual Fund. Common
illustrative purposes only and is stock total return is based on the
not indicative of the past, present Standard & Poor's 500 Index, a
or future performance of any market-value-weighted index made
specific investment. Investors up of 500 of the largest stocks
cannot invest directly in stock in the U.S. based upon their
indices. stock market value. Investors
cannot invest directly in indices.

____________________________________________

WORLD STOCK MARKET CAPITALIZATION BY REGION

World Total $12.4 Trillion

[GRAPH]

____________________________________________

Source: Morgan Stanley Capital International,
December 1994. Used with permission. This
chart represents the capitalization of major
world stock markets as measured by the Morgan
Stanley Capital International (MSCI) World
Index. The total market capitalization is
based on the value of 1577 companies in 22
countries (representing approximately 50% of
the aggregate market value of the stock
exchanged). This chart is for illustrative
purposes only and does not represent the
allocation of any Prudential Mutual Fund.

<PAGE>

This chart below shows the historical volatility of general
interest rates as measured by the long U.S. Treasury Bond.

Long U.S. Treasury Bond Yield in Percent (1926-1994)

__________________________________________________________

[GRAPH]

___________________________________________________________

Year-End

_________________________________________________

Source: Stocks, Bonds, Bills, and Inflation 1995 Yearbook,
Ibbotson Associates, Chicago (annually updates work by Roger G.
Ibbotson and Rex A. Sinquefield). Used with permission.
Allrights reserved. The chart illustrates the historical yield
of the long-term U.S. Treasury Bond from 1926-1994. Yields
represent that of an annually renewed one-bond portfolio with
a remaining maturity of approximately 20 years. This chart is
for illustrative purposes and should not be construed to
represent the yields of any Prudential Mutual Fund.

<PAGE>

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

Name of Fund Statement Date

Prudential Allocation Fund September 29, 1994
Strategy Portfolio
Conservatively Managed Portfolio

Prudential Equity Fund, Inc. February 28, 1995

Prudential Equity Income Fund December 30, 1994

Prudential Europe Growth Fund, Inc. June 30, 1995

Prudential Global Fund, Inc. January 3, 1995

Prudential Growth Opportunity Fund, Inc. February 1, 1995

Prudential Multi-Sector Fund, Inc. June 30, 1995

Prudential Pacific Growth Fund, Inc. January 3, 1995

Prudential Utility Fund, Inc. March 1, 1995

<PAGE>

Prudential Mutual Funds
Supplement dated September 29, 1995

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

MANAGER

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

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

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

(over)

<PAGE>

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

NAME OF FUND STATEMENT DATE
------------ --------------

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

<PAGE>
PART C
OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS

(A) FINANCIAL STATEMENTS:

(1) Financial Statements included in the Prospectus constituting Part A
of this Registration Statement:

Financial Highlights

(2) Financial Statements included in the Statement of Additional
Information constituting Part B of this Registration Statement:

Portfolio of Investments at October 31, 1994 (audited) and April 30,
1995 (unaudited).

Statement of Assets and Liabilities at October 31, 1994 (audited) and
April 30, 1995 (unaudited).

Statement of Operations for the year ended October 31, 1994 (audited)
and the six months ended April 30, 1995 (unaudited).

Statement of Changes in Net Assets for the year ended October 31,
1994 (audited) and the six months ended April 30, 1995 (unaudited).

Notes to Financial Statements (Part B).

Financial Highlights

Independent Auditors' Report.

(B) EXHIBITS

1. Amended and Restated Articles of Incorporation, incorporated by
reference to Exhibit 1 to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A (File No. 33-42391) filed via
EDGAR on January 3, 1995.

2. By-Laws of the Registrant, incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 3 to the Registration Statement on Form
N-1A (File No. 33-42391) filed via EDGAR.

3. Not Applicable.

4. (a) Specimen stock certificate (Class A Shares), incorporated by
reference to Exhibit No. 4(a) to the Registration Statement on Form
N-1A (file No. 33-42391) filed on August 20, 1991.

(b) Specimen stock certificate (Class B Shares), incorporated by
reference to Exhibit No. 4(b) to the Registration Statement on Form
N-1A (file No. 33-42391) filed on August 20, 1991.

(c) Instruments defining rights of shareholders, incorporated by
reference to Exhibit 4(c) to Post-Effective Amendment No. 2 to the
Registration Statement on form N-1A filed via EDGAR on December 30,
1993 (file No. 33-42391).

(b) Subadvisory Agreement between Prudential Mutual Fund Management,
Inc. and The Prudential Investment Corporation, incorporated by
reference to Exhibit No. 5(b) to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (file No. 33-42391) filed on
December 31, 1992.

C-1
<PAGE>
6. (a)(i) Distribution Agreement between the Registrant and Prudential
Mutual Fund Distributors, Inc. for the Class A shares dated July 1,
1993, incorporated by reference to Exhibit 6(a)(ii) to Post-Effective
Amendment No. 2 to the Registration Statement on form N-1A filed via
EDGAR on December 30, 1993 (file No. 33-42391).

(b)(i) ]Distribution Agreement between the Registrant and Prudential
Securities Incorporated for the Class B shares dated July 1, 1993,
incorporated by reference to Exhibit 6(b)(ii) to Post-Effective
Amendment No. 2 to the Registration Statement on form N-1A filed via
EDGAR on December 30, 1993 (file No. 33-42391).

(c) Selected Dealer Agreement, incorporated by reference to Exhibit
No. 6(c) to Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A (file No. 33-42391) filed on December 31, 1992.

(d) Distribution Agreement for Class A shares as amended and restated
as of June 5, 1995.*

(e) Distribution Agreement for Class B shares as amended and restated
as of June 5, 1995.*

(f) Distribution Agreement for Class C shares as amended and restated
as of June 5, 1995.*

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

7. Not Applicable.

8. (a) Custodian Contract between the Registrant and State Street Bank
and Trust Company, incorporated by reference to Exhibit No. 8 to
Post-Effective Amendment No. 1 to the Registration Statement on Form
N-1A (file No. 33-42391) filed on December 31, 1992.

(b) Form of Amendment to Custodian Contract.*

9. Transfer Agency and Service Agreement between Registrant and
Prudential Mutual Fund Services, Inc., incorporated by reference to
Exhibit No. 9 to Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A (file No. 33-42391) filed on December 31, 1992.

10. Opinion of Shereff, Friedman, Hoffman & Goodman, incorporated by
reference to Exhibit No. 10 to Amendment No. 1 to the Registration
Statement on Form N-1A (file No. 33-42391) filed on May 8, 1992.

11. Consent of Independent Accountants.*

12. Not Applicable.

14. Not Applicable.

15. (a)(i) Distribution and Service Plan for Class A shares dated July 1,
1993, incorporated by reference to Exhibit 15(a)(ii) to
Post-Effective Amendment No. 2 to the Registration Statement on form
N-1A filed via EDGAR on December 30, 1993 (file No. 33-42391).

(b)(i) Distribution and Service Plan for Class B shares dated July 1,
1993, incorporated by reference to Exhibit 15(b)(ii) to
Post-Effective Amendment No. 2 to the Registration Statement on form
N-1A filed via EDGAR on December 30, 1993 (file No. 33-42391).

(c) Distribution and Service Plan for Class A shares, incorporated by
reference to Exhibit No. 15(c) to Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A (file no. 33-42391) filed
via EDGAR on January 3, 1995.

(d) Distribution and Service Plan for Class B shares, incorporated by
reference to Exhibit No. 15(d) to Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A (file no. 33-42391) filed
via EDGAR on January 3, 1995.

C-2
<PAGE>

(e) Distribution and Service Plan for Class C shares, incorporated by
reference to Exhibit No. 15(e) to Post-Effective Amendment No. 5 to
the Registration Statement on Form N-1A (file no. 33-42391) filed
via EDGAR on January 3, 1995.

16. (a) Schedule of Computation of Performance Quotations, incorporated
by reference to Exhibit No 16 to Post-Effective Amendment No. 1 to
the Registration Statement on Form N-1A (file No. 33-42391) filed on
December 31, 1992.

17. Financial Data Schedules, filed as exhibit 27 for electronic
purposes.*

18. Rule 18f-3 Plan.*

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

* Filed herewith.

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

None

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of October 13, 1995, there were 18,659, 54,495 and 370 record holders of
Class A, Class B and Class C shares, respectively, of common stock, $.001 par
value per share, of the Registrant.

ITEM 27. INDEMNIFICATION

As permitted by Section 17(h) and (i) of the Investment Company Act of 1940
(the 1940 Act) and pursuant to Article VII of the Fund's By-Laws (Exhibit 2 to
the Registration Statement), officers, directors, employees and agents of the
Registrant will not be liable to the Registrant, any stockholder, officer,
director, employee, agent or other person for any action or failure to act,
except for bad faith, willful misfeasance, gross negligence or reckless
disregard of duties, and those individuals may be indemnified against
liabilities in connection with the Registrant, subject to the same exceptions.
Section 2-418 of Maryland General Corporation Law permits indemnification of
directors who acted in good faith and reasonably believed that the conduct was
in the best interest of the Registrant. As permitted by Section 17(i) of the
1940 Act, pursuant to Section 10 of each Distribution Agreement (Exhibits 6(a)
and 6(b) to the Registration Statement), the Distributor of the Registrant may
be indemnified against liabilities which may incur, except liabilities arising
from bad faith, gross negligence, willful misfeasance or reckless disregard of
duties.

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

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

C-3
<PAGE>
Section 9 of the Management Agreement (Exhibit 5(a) to the Registration
Statement) and Section 4 of the Subadvisory Agreement (Exhibit 5(b) to the
Registration Statement) limit the liability of Prudential Mutual Fund
Management, Inc. (PMF) and The Prudential Investment Corporation (PIC),
respectively, to liabilities arising from willful misfeasance, bad faith or
gross negligence in the performance of their respective duties or from reckless
disregard by them of their respective obligations and duties under the
agreements.

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

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER

(a) Prudential Mutual Fund Management, Inc.

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

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

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

<TABLE><CAPTION>
NAME AND ADDRESS POSITION WITH PMF PRINCIPAL OCCUPATIONS
- ------------------------ ---------------------- -----------------------------------------------
<S> <C> <C>
Brendan D. Boyle Executive Vice Executive Vice President and Director of
President and Director Marketing, PMF; Senior Vice President,
of Marketing Prudential Securities Incorporated
(Prudential Securities)

Stephen P. Fisher Senior Vice President Senior Vice President, PMF; Senior Vice
President, Prudential Securities

Frank W. Giordano Executive Vice Executive Vice President, General Counsel and
President, General Secretary, PMF; Senior Vice President,
Counsel and Secretary Prudential Securities

Robert F. Gunia Executive Vice Executive Vice President, Chief Financial and
President, Chief Administrative Officer, Treasurer and
Financial and Director, PMF; Senior Vice President,
Administrative Prudential Securities
Officer, Treasurer and
Director

Theresa A. Hamacher Director Director, PMF; Vice President, Prudential; Vice
President, Prudential Investment Corporation
(PIC)

Timothy J. O'Brien Director President, Chief Executive Officer, Chief
Operating Officer and Director, PMFD; Chief
Executive Officer and Director, PMFS;
Director, PMF

Richard A. Redeker President, Chief President, Chief Executive Officer and
Executive Officer and Director, PMF; Executive Vice President,
Director Director and Member of Operating Committee,
Prudential Securities; Director, PSG; Vice
President, PIC

S. Jane Rose Senior Vice President, Senior Vice President, Senior Counsel and
Senior Counsel and Assistant Secretary, PMF; Senior Vice
Assistant Secretary President and Senior Counsel, Prudential
Securities
</TABLE>

C-4
<PAGE>
(b) The Prudential Investment Corporation (PIC)

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

<TABLE><CAPTION>
NAME AND ADDRESS POSITION WITH PIC PRINCIPAL OCCUPATIONS
- ------------------------ ---------------------- -----------------------------------------------
<S> <C> <C>
William M. Bethke Senior Vice President Senior Vice President, Prudential; Senior Vice
Two Gateway Center President, PIC
Newark NJ 07102

John D. Brookmeyer, Jr. Senior Vice President Senior Vice President, Prudential; Senior Vice
Two Gateway Center President, PIC
Newark, NJ 07102

Barry M. Gillman Director Director, PIC

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

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

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

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

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

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

ITEM 29. PRINCIPAL UNDERWRITERS

(a)(i) Prudential Securities

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

C-5
<PAGE>
Nicholas-Applegate Fund, Inc. (Nicholas-Applegate Growth Equity Fund) and The
BlackRock Government Income Trust. Prudential Securities is also a depositor for
the following unit investment trusts:

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

(ii) Prudential Mutual Fund Distributors, Inc.

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

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

C-6
<PAGE>

<TABLE><CAPTION>
POSITIONS AND
POSITIONS AND OFFICES WITH OFFICES WITH
NAME(1) UNDERWRITER REGISTRANT
- ------------------------------------- ------------------------------------- ---------------
<S> <C> <C>
Robert Golden........................ Executive Vice President and Director None
Alan D. Hogan........................ Executive Vice President, Chief None
Administrative Officer and Director
Howard A. Knight..................... Executive Vice President, Director, None
Corporate Strategy and New Business
Development
George A. Murray..................... Executive Vice President and Director None
Leland B. Paton...................... Executive Vice President and Director None
Vincent T. Pica, II.................. Director, Member of Operating None
Committee and Executive Vice
President
Richard A. Redeker................... Executive Vice President and Director Director
Gregory W. Scott..................... Executive Vice President, Chief None
Financial Officer and Director
Hardwick Simmons..................... Chief Executive Officer, President None
and Director
Lee B. Spencer Jr.................... General Counsel; Executive Vice None
President and Director
</TABLE>

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

<TABLE>
<S> <C> <C>
Joanne Accurso-Soto.................. Vice President None
Dennis Annarumma..................... Vice President, Assistant Treasurer None
and Assistant Comptroller
Phyllis J. Berman.................... Vice President None
Brendan D. Boyle..................... Chairman and Director None
Stephen P. Fisher.................... Vice President None
Frank W. Giordano.................... Executive Vice President, General None
Counsel, Secretary and Director
Robert F. Gunia...................... Executive Vice President, Treasurer, Vice President
Comptroller and Director
Timothy J. O'Brien................... President, Chief Executive Officer, None
Chief Operating Officer and
Director
Richard A. Redeker................... Director Director and
President
Andrew J. Varley..................... Vice President None
Anita L. Whelan...................... Vice President and Assistant None
Secretary
</TABLE>

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

(1) The address of each person named is One Seaport Plaza, New York, NY 10292
unless otherwise indicated.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS

All accounts, books and other documents required to be maintained by Section
31(a) of the 1940 Act and the Rules thereunder are maintained at the offices of
State Street Bank and Trust Company, One Heritage Drive, North Quincy,
Massachusetts 02171. The Prudential Investment Corporation, Prudential Plaza,
745 Broad Street, Newark, New Jersey 07102, the Registrant, One Seaport Plaza,
New York, New York 10292, and Prudential Mutual Fund Services, Inc., Raritan
Plaza One, Edison,

C-7
<PAGE>
New Jersey 08837. Documents required by Rules 31a-1(b)(5), (6), (7), (9), (10)
and (11) and 31a-1(f) will be kept at Three Gateway Center, documents required
by Rules 31a-1(b)(4) and (11) and 31a-1(d) at One Seaport Plaza and the
remaining accounts, books and other documents required by such other pertinent
provisions of Section 31(a) and the Rules promulgated thereunder will be kept by
State Street Bank and Trust Company and Prudential Mutual Fund Services, Inc.

ITEM 31. MANAGEMENT SERVICES

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

ITEM 32. UNDERTAKINGS

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

C-8
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it has duly caused
this Post-Effective Amendment to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of New York,
and State of New York, on the 2nd day of November, 1995.

PRUDENTIAL PACIFIC GROWTH FUND, INC.

/s/ RICHARD A. REDEKER

......................................

(Richard A. Redeker, President)

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

<TABLE><CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STEPHEN C. EYRE Director November 2, 1995
......................................
Stephen C. Eyre

/s/ DELAYNE D. GOLD Director November 2, 1995
......................................
Delayne D. Gold

/s/ DON G. HOFF Director November 2, 1995
......................................
Don G. Hoff

/s/ HARRY A. JACOBS, JR. Director November 2, 1995
......................................
Harry A. Jacobs, Jr.

/s/ SIDNEY R. KNAFEL Director November 2, 1995
......................................
Sidney R. Knafel

/s/ ROBERT E. LABLANC Director November 2, 1995
......................................
Robert E. LaBlanc

/s/ THOMAS A. OWENS, JR. Director November 2, 1995
......................................
Thomas A. Owens, Jr.

/s/ RICHARD A. REDEKER President and Director November 2, 1995
......................................
Richard A. Redeker

/s/ CLAY T. WHITEHEAD Director November 2, 1995
......................................
Clay T. Whitehead

/s/ EUGENE S. STARK Treasurer, Principal November 2, 1995
...................................... Financial and Accounting
Eugene S. Stark Officer
</TABLE>

<PAGE>
EXHIBIT INDEX

<TABLE>
<C> <S> <C>
1. Amended and Restated Articles of Incorporation incorporated by reference to
Exhibit No. 1 to Post-Effective Amendment No. 5 to the Registration
Statement on Form N-1A (file No. 33-42391) filed via EDGAR on January 3,
1995.

2. By-Laws of the Registrant, incorporated by reference to Exhibit 2 to
Post-Effective Amendment No. 3 to the Registration Statement on Form N-1A
(File No. 33,42391) filed via EDGAR.

3. Not Applicable.

4. (a) Specimen stock certificate (Class A Shares), incorporated by reference
to Exhibit No. 4(a) to the Registration Statement on Form N-1A (file No.
33-42391) filed on August 20, 1991.
(b) Specimen stock certificate (Class B Shares), incorporated by reference
to Exhibit No. 4(b) to the Registration Statement on Form N-1A (file No.
33-42391) filed on August 20, 1991.
(c) Instruments defining rights of shareholders, incorporated by reference
to Exhibit 4(c) to Post-Effective Amendment No. 2 to the Registration
Statement on form N-1A filed via EDGAR on December 30, 1993 (file No.
33-42391).

5. (a) Management Agreement between the Registrant and Prudential Mutual Fund
Management, Inc., incorporated by reference to Exhibit No. 5(a) to
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
(file No. 33-42391) filed on December 31, 1992.
(b) Subadvisory Agreement between Prudential Mutual Fund Management, Inc.
and The Prudential Investment Corporation, incorporated by reference to
Exhibit No. 5(b) to Post-Effective Amendment No. 1 to the Registration
Statement on Form N-1A (file No. 33-42391) filed on December 31, 1992.

6. (a)(i) Distribution Agreement between the Registrant and Prudential Mutual
Fund Distributors, Inc. for the Class A shares dated July 1, 1993,
incorporated by reference to Exhibit 6(a)(ii) to Post-Effective Amendment
No. 2 to the Registration Statement on form N-1A filed via EDGAR on December
30, 1993 (file No. 33-42391).

(b)(i) Distribution Agreement between the Registrant and Prudential
Securities Incorporated for the Class B shares dated July 1, 1993,
incorporated by reference to Exhibit 6(b)(ii) to Post-Effective Amendment
No. 2 to the Registration Statement on form N-1A filed via EDGAR on December
30, 1993 (file No. 33-42391).

(c) Selected Dealer Agreement, incorporated by reference to Exhibit No. 6(c)
to Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
(file No. 33-42391) filed on December 31, 1992.

(d) Distribution Agreement for Class A shares as amended and restated as of
June 5, 1995.*

(e) Distribution Agreement for Class B shares as amended and restated as of
June 5, 1995.*

(f) Distribution Agreement for Class C shares as amended and restated as of
June 5, 1995.*

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

7. Not Applicable.
</TABLE>

<PAGE>

<TABLE>

<C> <S> <C>
8. (a) Custodian Contract between the Registrant and State Street Bank and
Trust Company, incorporated by reference to Exhibit No. 8 to Post-Effective
Amendment No. 1 to the Registration Statement on Form N-1A (file No.
33-42391) filed on December 31, 1992.
(b) Form of Amendment to Custodian Contract.*

9. Transfer Agency and Service Agreement between Registrant and Prudential
Mutual Fund Services, Inc., incorporated by reference to Exhibit No. 9 to
Post-Effective Amendment No. 1 to the Registration Statement on Form N-1A
(file No. 33-42391) filed on December 31, 1992.

10. Opinion of Shereff, Friedman, Hoffman & Goodman, incorporated by reference
to Exhibit No. 10 to Amendment No. 1 to the Registration Statement on Form
N-1A (file No. 33-42391) filed on May 8, 1992.

11. Consent of Independent Accountants.*

12. Not Applicable.

14. Not Applicable.

15. (a)(i) Distribution and Service Plan for Class A shares, dated July 1, 1993
incorporated by reference to Exhibit 15(a)(ii) to Post-Effective Amendment
No. 2 to the Registration Statement on form N-1A filed via EDGAR on December
30, 1993 (file No. 33-42391).

(b)(i) Amended and Restated Distribution and Service Plan for Class B shares
dated July 1, 1993, incorporated by reference to Exhibit 15(b)(ii) to
Post-Effective Amendment No. 2 to the Registration Statement on form N-1A
filed via EDGAR on December 30, 1993 (file No. 33-42391).

(c) Distribution and Service Plan for Class A shares, incorporated by
reference to Exhibit No. 15(c) to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A (file no. 33-42391) filed via EDGAR on
January 3, 1995.

(d) Distribution and Service Plan for Class B shares, incorporated by
reference to Exhibit No. 15(d) to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A (file no. 33-42391) filed via EDGAR on
January 3, 1995.

(e) Distribution and Service Plan for Class C shares, incorporated by
reference to Exhibit No. 15(e) to Post-Effective Amendment No. 5 to the
Registration Statement on Form N-1A (file no. 33-42391) filed via EDGAR on
January 3, 1995.

16. (a) Schedule of Computation of Performance Quotations, incorporated by
reference to Exhibit No 16 to Post-Effective Amendment No. 1 to the
Registration Statement on Form N-1A (file No. 33-42391) filed on December
31, 1992.

17. Financial Data Schedules, filed as exhibit 27 for electronic pruposes.*

18. Rule 18f-3 Plan.*
</TABLE>

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

Exhibit 6(d)

PRUDENTIAL PACIFIC GROWTH FUND, INC.

Distribution Agreement
(Class A Shares)
----------------

Agreement made as of August 1, 1994 and amended and restated as of
June 5, 1995, between Prudential Pacific Growth Fund, Inc., a Maryland
Corporation (the Fund) and Prudential Mutual Fund Distributors, Inc., a Delaware
Corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act of
1940, as amended (the Investment Company Act), as a diversified, open-end,
management investment company and it is in the interest of the Fund to offer its
Class A shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business of
selling shares of registered investment companies either directly or through
other broker-dealers;

WHEREAS, the Fund and the Distributor wish to enter into an agreement
with each other, with respect to the continuous offering of the Fund's Class A
shares from and after the date hereof in order to promote the growth of the Fund
and facilitate the distribution of its Class A shares; and

WHEREAS, upon approval by the Class A shareholders of the Fund it is
contemplated that the Fund will adopt a plan of distribution pursuant to Rule
12b-1 under the Investment Company Act (the Plan) authorizing payments by the
Fund to the Distributor with respect to the distribution of Class A shares of
the Fund and the maintenance of Class A shareholder accounts.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor
------------------------------

The Fund hereby appoints the Distributor as the principal underwriter
and distributor of the Class A shares of the Fund to sell Class A shares to the
public on behalf of the Fund and the Distributor hereby accepts such appointment
and agrees to act hereunder. The Fund hereby agrees during the term of this
Agreement to sell Class A shares of the Fund through the Distributor on the
terms and conditions set forth below.

<PAGE>

Section 2. Exclusive Nature of Duties
--------------------------

The Distributor shall be the exclusive representative of the Fund to
act as principal underwriter and distributor of the Fund's Class A shares,
except that:

2.1 The exclusive rights granted to the Distributor to sell Class A
shares of the Fund shall not apply to Class A shares of the Fund issued in
connection with the merger or consolidation of any other investment company or
personal holding company with the Fund or the acquisition by purchase or
otherwise of all (or substantially all) the assets or the outstanding shares of
any such company by the Fund.

2.2 Such exclusive rights shall not apply to Class A shares issued by
the Fund pursuant to reinvestment of dividends or capital gains distributions.

2.3 Such exclusive rights shall not apply to Class A shares issued by
the Fund pursuant to the reinstatement privilege afforded redeeming
shareholders.

2.4 Such exclusive rights shall not apply to purchases made through
the Fund's transfer and dividend disbursing agent in the manner set forth in the
currently effective Prospectus of the Fund. The term "Prospectus" shall mean
the Prospectus and Statement of Additional Information included as part of the
Fund's Registration Statement, as such Prospectus and Statement of Additional
Information may be amended or supplemented from time to time, and the term
"Registration Statement" shall mean the Registration Statement filed by the Fund
with the Securities and Exchange Commission and effective under the Securities
Act of 1933, as amended (Securities Act), and the Investment Company Act, as
such Registration Statement is amended from time to time.

Section 3. Purchase of Class A Shares from the Fund
----------------------------------------

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Class A shares needed, but not more than the Class A
shares needed (except for clerical errors in transmission) to fill unconditional
orders for Class A shares placed with the Distributor by investors or registered
and qualified securities dealers and other financial institutions (selected
dealers).

3.2 The Class A shares shall be sold by the Distributor on behalf of
the Fund and delivered by the Distributor or selected dealers, as described in
Section 6.4 hereof, to investors at the offering price as set forth in the
Prospectus.

<PAGE>

3.3 The Fund shall have the right to suspend the sale of its Class A
shares at times when redemption is suspended pursuant to the conditions in
Section 4.3 hereof or at such other times as may be determined by the Board of
Directors. The Fund shall also have the right to suspend the sale of its Class
A shares if a banking moratorium shall have been declared by federal or New York
authorities.

3.4 The Fund, or any agent of the Fund designated in writing by the
Fund, shall be promptly advised of all purchase orders for Class A shares
received by the Distributor. Any order may be rejected by the Fund; provided,
however, that the Fund will not arbitrarily or without reasonable cause refuse
to accept or confirm orders for the purchase of Class A shares. The Fund (or
its agent) will confirm orders upon their receipt, will make appropriate book
entries and upon receipt by the Fund (or its agent) of payment therefor, will
deliver deposit receipts for such Class A shares pursuant to the instructions of
the Distributor. Payment shall be made to the Fund in New York Clearing House
funds or federal funds. The Distributor agrees to cause such payment and such
instructions to be delivered promptly to the Fund (or its agent).

Section 4. Repurchase or Redemption of Class A Shares by the Fund
------------------------------------------------------

4.1 Any of the outstanding Class A shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the Class A
shares so tendered in accordance with its Articles of Incorporation as amended
from time to time, and in accordance with the applicable provisions of the
Prospectus. The price to be paid to redeem or repurchase the Class A shares
shall be equal to the net asset value determined as set forth in the Prospectus.
All payments by the Fund hereunder shall be made in the manner set forth in
Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price as
defined in the above paragraph pursuant to the instructions of the Distributor
on or before the seventh calendar day subsequent to its having received the
notice of redemption in proper form. The proceeds of any redemption of Class A
shares shall be paid by the Fund to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions of the
Prospectus.

4.3 Redemption of Class A shares or payment may be suspended at times
when the New York Stock Exchange is closed for other than customary weekends and
holidays, when trading on said Exchange is restricted, when an emergency exists
as a result of which disposal by the Fund of securities owned by it is not
reasonably practicable or it is not reasonably practicable for the Fund fairly
to determine the value of its net assets, or during any

<PAGE>

other period when the Securities and Exchange Commission, by order, so permits.

Section 5. Duties of the Fund
------------------

5.1 Subject to the possible suspension of the sale of Class A shares
as provided herein, the Fund agrees to sell its Class A shares so long as it has
Class A shares available.

5.2 The Fund shall furnish the Distributor copies of all information,
financial statements and other papers which the Distributor may reasonably
request for use in connection with the distribution of Class A shares, and this
shall include one certified copy, upon request by the Distributor, of all
financial statements prepared for the Fund by independent public accountants.
The Fund shall make available to the Distributor such number of copies of its
Prospectus and annual and interim reports as the Distributor shall reasonably
request.

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Directors and the shareholders, all necessary
action to fix the number of authorized Class A shares and such steps as may be
necessary to register the same under the Securities Act, to the end that there
will be available for sale such number of Class A shares as the Distributor
reasonably may expect to sell. The Fund agrees to file from time to time such
amendments, reports and other documents as may be necessary in order that there
will be no untrue statement of a material fact in the Registration Statement, or
necessary in order that there will be no omission to state a material fact in
the Registration Statement which omission would make the statements therein
misleading.

5.4 The Fund shall use its best efforts to qualify and maintain the
qualification of any appropriate number of its Class A shares for sales under
the securities laws of such states as the Distributor and the Fund may approve;
provided that the Fund shall not be required to amend its Articles of
Incorporation or By-Laws to comply with the laws of any state, to maintain an
office in any state, to change the terms of the offering of its Class A shares
in any state from the terms set forth in its Registration Statement, to qualify
as a foreign corporation in any state or to consent to service of process in any
state other than with respect to claims arising out of the offering of its Class
A shares. Any such qualification may be withheld, terminated or withdrawn by
the Fund at any time in its discretion. As provided in Section 9.1 hereof, the
expense of qualification and maintenance of qualification shall be borne by the
Fund. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund in
connection with such qualifications.

<PAGE>

Section 6. Duties of the Distributor
-------------------------

6.1 The Distributor shall devote reasonable time and effort to effect
sales of Class A shares of the Fund, but shall not be obligated to sell any
specific number of Class A shares. Sales of the Class A shares shall be on the
terms described in the Prospectus. The Distributor may enter into like
arrangements with other investment companies. The Distributor shall compensate
the selected dealers as set forth in the Prospectus.

6.2 In selling the Class A shares, the Distributor shall use its best
efforts in all respects duly to conform with the requirements of all federal and
state laws relating to the sale of such securities. Neither the Distributor nor
any selected dealer nor any other person is authorized by the Fund to give any
information or to make any representations, other than those contained in the
Registration Statement or Prospectus and any sales literature approved by
appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with the
requirements of the National Association of Securities Dealers, Inc. (NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and other
financial institutions of its choice for the sale of Class A shares, provided
that the Fund shall approve the forms of such agreements. Within the United
States, the Distributor shall offer and sell Class A shares only to such
selected dealers as are members in good standing of the NASD. Class A shares
sold to selected dealers shall be for resale by such dealers only at the
offering price determined as set forth in the Prospectus.

Section 7. Payments to the Distributor
---------------------------

The Distributor shall receive and may retain any portion of any
front-end sales charge which is imposed on sales of Class A shares and not
reallocated to selected dealers as set forth in the Prospectus, subject to the
limitations of Article III, Section 26 of the NASD Rules of Fair Practice.
Payment of these amounts to the Distributor is not contingent upon the adoption
or continuation of the Plan.

Section 8. Payment of the Distributor under the Plan
-----------------------------------------

8.1 The Fund shall pay to the Distributor as compensation for
services under the Distribution and Service Plan and this Agreement a fee of .30
of 1% (including an asset-based sales charge of .05 of 1% and a service fee of
.25 of 1%) per annum

<PAGE>

of the average daily net assets of the Class A shares of the Fund. Amounts
payable under the Plan shall be accrued daily and paid monthly or at such other
intervals as the Directors may determine. Amounts payable under the Plan shall
be subject to the limitations of Article III, Section 26 of the NASD Rules of
Fair Practice.

8.2 So long as the Plan or any amendment thereto is in effect, the
Distributor shall inform the Board of Directors of the commissions and account
servicing fees to be paid by the Distributor to account executives of the
Distributor and to broker-dealers and financial institutions which have dealer
agreements with the Distributor. So long as the Plan (or any amendment thereto)
is in effect, at the request of the Board of Directors or any agent or
representative of the Fund, the Distributor shall provide such additional
information as may reasonably be requested concerning the activities of the
Distributor hereunder and the costs incurred in performing such activities.

8.3 Expenses of distribution with respect to the Class A shares of
the Fund include, among others:

(a) amounts paid to Prudential Securities for performing
services under a selected dealer agreement between
Prudential Securities and the Distributor for sale of Class
A shares of the Fund, including sales commissions and
trailer commissions paid to, or on account of, account
executives and indirect and overhead costs associated with
distribution activities, including central office and branch
expenses;

(b) amounts paid to Prusec for performing services under a
selected dealer agreement between Prusec and the Distributor
for sale of Class A shares of the Fund, including sales
commissions and trailer commissions paid to, or on account
of, agents and indirect and overhead costs associated with
distribution activities;

(c) sales commissions and trailer commissions paid to, or on
account of, broker-dealers and financial institutions (other
than Prudential Securities and Prusec) which have entered
into selected dealer agreements with the Distributor with
respect to Class A shares of the Fund.

(d) amounts paid to, or an account of, account executives of
Prudential Securities, Prusec, or of other broker-dealers or
financial

<PAGE>

institutions for personal service and/or the maintenance of
shareholder accounts; and

(e) advertising for the Fund in various forms through any
available medium, including the cost of printing and mailing
Fund Prospectuses, and periodic financial reports and sales
literature to persons other than current shareholders of the
Fund.

Indirect and overhead costs referred to in clauses (a) and (b) of the
foregoing sentence include (i) lease expenses, (ii) salaries and benefits of
personnel including operations and sales support personnel, (iii) utility
expenses, (iv) communications expenses, (v) sales promotion expenses, (vi)
expenses of postage, stationery and supplies and (vii) general overhead.

Section 9. Allocation of Expenses
----------------------

9.1 The Fund shall bear all costs and expenses of the continuous
offering of its Class A shares, including fees and disbursements of its counsel
and auditors, in connection with the preparation and filing of any required
Registration Statements and/or Prospectuses under the Investment Company Act or
the Securities Act, and preparing and mailing annual and periodic reports and
proxy materials to shareholders (including but not limited to the expense of
setting in type any such Registration Statements, Prospectuses, annual or
periodic reports or proxy materials). The Fund shall also bear the cost of
expenses of qualification of the Class A shares for sale, and, if necessary or
advisable in connection therewith, of qualifying the Fund as a broker or dealer,
in such states of the United States or other jurisdictions as shall be selected
by the Fund and the Distributor pursuant to Section 5.4 hereof and the cost and
expense payable to each such state for continuing qualification therein until
the Fund decides to discontinue such qualification pursuant to Section 5.4
hereof. As set forth in Section 8 above, the Fund shall also bear the expenses
it assumes pursuant to the Plan with respect to Class A shares, so long as the
Plan is in effect.

Section 10. Indemnification
---------------

10.1 The Fund agrees to indemnify, defend and hold the Distributor,
its officers and directors and any person who controls the Distributor within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending such claims, demands or liabilities and any
counsel fees incurred in connection therewith) which the Distributor, its
officers, directors or any such controlling person may incur under the
Securities Act, or under common law or otherwise, arising out of or based upon
any untrue statement of a

<PAGE>

material fact contained in the Registration Statement or Prospectus or arising
out of or based upon any alleged omission to state a material fact required to
be stated in either thereof or necessary to make the statements in either
thereof not misleading, except insofar as such claims, demands, liabilities or
expenses arise out of or are based upon any such untrue statement or omission or
alleged untrue statement or omission made in reliance upon and in conformity
with information furnished in writing by the Distributor to the Fund for use in
the Registration Statement or Prospectus; provided, however, that this indemnity
agreement shall not inure to the benefit of any such officer, director, trustee
or controlling person unless a court of competent jurisdiction shall determine
in a final decision on the merits, that the person to be indemnified was not
liable by reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of such
a decision, a reasonable determination, based upon a review of the facts, that
the indemnified person was not liable by reason of disabling conduct, by (a) a
vote of a majority of a quorum of directors or trustees who are neither
"interested persons" of the Fund as defined in Section 2(a)(19) of the
Investment Company Act nor parties to the proceeding, or (b) an independent
legal counsel in a written opinion. The Fund's agreement to indemnify the
Distributor, its officers and directors or trustees and any such controlling
person as aforesaid is expressly conditioned upon the Fund's being promptly
notified of any action brought against the Distributor, its officers or
directors or trustees, or any such controlling person, such notification to be
given by letter or telegram addressed to the Fund at its principal business
office. The Fund agrees promptly to notify the Distributor of the commencement
of any litigation or proceedings against it or any of its officers or directors
in connection with the issue and sale of any Class A shares.

10.2 The Distributor agrees to indemnify, defend and hold the Fund,
its officers and Directors and any person who controls the Fund, if any, within
the meaning of Section 15 of the Securities Act, free and harmless from and
against any and all claims, demands, liabilities and expenses (including the
cost of investigating or defending against such claims, demands or liabilities
and any counsel fees incurred in connection therewith) which the Fund, its
officers and Directors or any such controlling person may incur under the
Securities Act or under common law or otherwise, but only to the extent that
such liability or expense incurred by the Fund, its Directors or officers or
such controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained in
information furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus or shall arise out of or be based upon any
alleged omission to state a material fact in connection with such information
required to be

<PAGE>

stated in the Registration Statement or Prospectus or necessary to make such
information not misleading. The Distributor's agreement to indemnify the Fund,
its officers and Directors and any such controlling person as aforesaid, is
expressly conditioned upon the Distributor's being promptly notified of any
action brought against the Fund, its officers and Directors or any such
controlling person, such notification being given to the Distributor at its
principal business office.

Section 11. Duration and Termination of this Agreement
------------------------------------------

11.1 This Agreement shall become effective as of the date first above
written and shall remain in force for two years from the date hereof and
thereafter, but only so long as such continuance is specifically approved at
least annually by (a) the Board of Directors of the Fund, or by the vote of a
majority of the outstanding voting securities of the Class A shares of the Fund,
and (b) by the vote of a majority of those Directors who are not parties to this
Agreement or interested persons of any such parties and who have no direct or
indirect financial interest in this Agreement or in the operation of the Fund's
Plan or in any agreement related thereto (Rule 12b-1 Directors), cast in person
at a meeting called for the purpose of voting upon such approval.

11.2 This Agreement may be terminated at any time, without the
payment of any penalty, by a majority of the Rule 12b-1 Directors or by vote of
a majority of the outstanding voting securities of the Class A shares of the
Fund, or by the Distributor, on sixty (60) days' written notice to the other
party. This Agreement shall automatically terminate in the event of its
assignment.

11.3 The terms "affiliated person," "assignment," "interested person"
and "vote of a majority of the outstanding
voting securities", when used in this Agreement, shall have the respective
meanings specified in the Investment Company Act.

Section 12. Amendments to this Agreement
----------------------------

This Agreement may be amended by the parties only if such amendment is
specifically approved by (a) the Board of Directors of the Fund, or by the vote
of a majority of the outstanding voting securities of the Class A shares of the
Fund, and (b) by the vote of a majority of the Rule 12b-1 Directors cast in
person at a meeting called for the purpose of voting on such amendment.

Section 13. Governing Law
-------------

<PAGE>

the State of New York, or any of the provisions herein, conflict with the
applicable provisions of the Investment Company Act, the latter shall control.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year above written.

Prudential Mutual Fund
Distributors, Inc.

By: /s/ Robert F. Gunia
------------------------
Robert F. Gunia
Executive Vice President

Prudential Pacific Growth Fund, Inc.

By: /s/ Richard A. Redeker
------------------------
Richard A. Redeker
President

Exhibit 6(e)

PRUDENTIAL PACIFIC GROWTH FUND, INC.

Distribution Agreement
(Class B Shares)
----------------

Agreement made as of August 1, 1994 and amended and restated as
of June 5, 1995, between Prudential Pacific Growth Fund, Inc., a Maryland
Corporation (the Fund) and Prudential Securities Incorporated, a Delaware
Corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act
of 1940, as amended (the Investment Company Act), as a diversified, open-
end, management investment company and it is in the interest of the Fund to
offer its Class B shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business
of selling shares of registered investment companies either directly or
through other broker-dealers;

WHEREAS, the Fund and the Distributor wish to enter into an
agreement with each other, with respect to the continuous offering of the
Fund's Class B shares from and after the date hereof in order to promote
the growth of the Fund and facilitate the distribution of its Class B
shares; and

WHEREAS, the Fund has adopted a distribution and service plan
pursuant to Rule 12b-1 under the Investment Company Act (the Plan)
authorizing payments by the Fund to the Distributor with respect to the
distribution of Class B shares of the Fund and the maintenance of Class B
shareholder accounts.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor
------------------------------

The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Class B shares of the Fund to sell Class
B shares to the public on behalf of the Fund and the Distributor hereby
accepts such appointment and agrees to act hereunder. The Fund hereby
agrees during the term of this Agreement to sell Class B shares of the Fund
through the Distributor on the terms and conditions set forth below.

Section 2. Exclusive Nature of Duties
--------------------------

The Distributor shall be the exclusive representative of the Fund
to act as principal underwriter and distributor of the Fund's Class B
shares, except that:

<PAGE>

2.1 The exclusive rights granted to the Distributor to sell
Class B shares of the Fund shall not apply to Class B shares of the Fund
issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all) the
assets or the outstanding shares of any such company by the Fund.

2.2 Such exclusive rights shall not apply to Class B shares
issued by the Fund pursuant to reinvestment of dividends or capital gains
distributions.

2.3 Such exclusive rights shall not apply to Class B shares
issued by the Fund pursuant to the reinstatement privilege afforded
redeeming shareholders.

2.4 Such exclusive rights shall not apply to purchases made
through the Fund's transfer and dividend disbursing agent in the manner set
forth in the currently effective Prospectus of the Fund. The term
"Prospectus" shall mean the Prospectus and Statement of Additional
Information included as part of the Fund's Registration Statement, as such
Prospectus and Statement of Additional Information may be amended or
supplemented from time to time, and the term "Registration Statement" shall
mean the Registration Statement filed by the Fund with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
amended (the Securities Act), and the Investment Company Act, as such
Registration Statement is amended from time to time.

Section 3. Purchase of Class B Shares from the Fund
----------------------------------------

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Class B shares needed, but not more than the Class
B shares needed (except for clerical errors in transmission) to fill
unconditional orders for Class B shares placed with the Distributor by
investors or registered and qualified securities dealers and other
financial institutions (selected dealers).

3.2 The Class B shares shall be sold by the Distributor on
behalf of the Fund and delivered by the Distributor or selected dealers, as
described in Section 6.4 hereof, to investors at the offering price as set
forth in the Prospectus.

3.3 The Fund shall have the right to suspend the sale of its
Class B shares at times when redemption is suspended pursuant to the
conditions in Section 4.3 hereof or at such other times as may be
determined by the Board of Directors. The Fund shall also have the right
to suspend the sale of its Class B shares if a banking moratorium shall
have been declared by federal or New York authorities.

<PAGE>

3.4 The Fund, or any agent of the Fund designated in writing by
the Fund, shall be promptly advised of all purchase orders for Class B
shares received by the Distributor. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily or without reasonable
cause refuse to accept or confirm orders for the purchase of Class B
shares. The Fund (or its agent) will confirm orders upon their receipt,
will make appropriate book entries and upon receipt by the Fund (or its
agent) of payment therefor, will deliver deposit receipts for such Class B
shares pursuant to the instructions of the Distributor. Payment shall be
made to the Fund in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Fund (or its agent).

Section 4. Repurchase or Redemption of Class B Shares by the Fund
------------------------------------------------------

4.1 Any of the outstanding Class B shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the
Class B shares so tendered in accordance with its Articles of Incorporation
as amended from time to time, and in accordance with the applicable
provisions of the Prospectus. The price to be paid to redeem or repurchase
the Class B shares shall be equal to the net asset value determined as set
forth in the Prospectus. All payments by the Fund hereunder shall be made
in the manner set forth in Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price
as defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh day subsequent to its having received
the notice of redemption in proper form. The proceeds of any redemption of
Class B shares shall be paid by the Fund as follows: (a) any applicable
contingent deferred sales charge shall be paid to the Distributor and (b)
the balance shall be paid to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions of the
Prospectus.

4.3 Redemption of Class B shares or payment may be suspended at
times when the New York Stock Exchange is closed for other than customary
weekends and holidays, when trading on said Exchange is restricted, when an
emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets,
or during any other period when the Securities and Exchange Commission, by
order, so permits.

<PAGE>

Section 5. Duties of the Fund
------------------

5.1 Subject to the possible suspension of the sale of Class B
shares as provided herein, the Fund agrees to sell its Class B shares so
long as it has Class B shares available.

5.2 The Fund shall furnish the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of Class
B shares, and this shall include one certified copy, upon request by the
Distributor, of all financial statements prepared for the Fund by
independent public accountants. The Fund shall make available to the
Distributor such number of copies of its Prospectus and annual and interim
reports as the Distributor shall reasonably request.

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Directors and the shareholders, all
necessary action to fix the number of authorized Class B shares and such
steps as may be necessary to register the same under the Securities Act, to
the end that there will be available for sale such number of Class B shares
as the Distributor reasonably may expect to sell. The Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there will be no untrue statement of a material
fact in the Registration Statement, or necessary in order that there will
be no omission to state a material fact in the Registration Statement which
omission would make the statements therein misleading.

5.4 The Fund shall use its best efforts to qualify and maintain
the qualification of any appropriate number of its Class B shares for sales
under the securities laws of such states as the Distributor and the Fund
may approve; provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of any state,
to maintain an office in any state, to change the terms of the offering of
its Class B shares in any state from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any state or
to consent to service of process in any state other than with respect to
claims arising out of the offering of its Class B shares. Any such
qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 9.1 hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund.
The Distributor shall furnish such information and other material relating
to its affairs and activities as may be required by the Fund in connection
with such qualifications.

<PAGE>

Section 6. Duties of the Distributor
-------------------------

6.1 The Distributor shall devote reasonable time and effort to
effect sales of Class B shares of the Fund, but shall not be obligated to
sell any specific number of Class B shares. Sales of the Class B shares
shall be on the terms described in the Prospectus. The Distributor may
enter into like arrangements with other investment companies. The
Distributor shall compensate the selected dealers as set forth in the
Prospectus.

6.2 In selling the Class B shares, the Distributor shall use its
best efforts in all respects duly to conform with the requirements of all
federal and state laws relating to the sale of such securities. Neither
the Distributor nor any selected dealer nor any other person is authorized
by the Fund to give any information or to make any representations, other
than those contained in the Registration Statement or Prospectus and any
sales literature approved by appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with
the requirements of the National Association of Securities Dealers, Inc.
(NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and
other financial institutions of its choice for the sale of Class B shares,
provided that the Fund shall approve the forms of such agreements. Within
the United States, the Distributor shall offer and sell Class B shares only
to such selected dealers as are members in good standing of the NASD.
Class B shares sold to selected dealers shall be for resale by such dealers
only at the offering price determined as set forth in the Prospectus.

Section 7. Payments to the Distributor
---------------------------

The Distributor shall receive and may retain any contingent
deferred sales charge which is imposed with respect to repurchases and
redemptions of Class B shares as set forth in the Prospectus, subject to
the limitations of Article III, Section 26 of the NASD Rules of Fair
Practice. Payment of these amounts to the Distributor is not contingent
upon the adoption or continuation of the Plan.

Section 8. Payment of the Distributor under the Plan
-----------------------------------------

8.1 The Fund shall pay to the Distributor as compensation for
services under the Distribution and Service Plan and this Agreement a fee
of 1% (including an asset-based sales charge of .75 of 1% and a service fee
of .25 of 1%) per annum of

<PAGE>

the average daily net assets of the Class B shares of the Fund. Amounts
payable under the Plan shall be accrued daily and paid monthly or at such
other intervals as Directors may determine. Amounts payable under the Plan
shall be subject to the limitations of Article III, Section 26 of the NASD
Rules of Fair Practice.

8.2 So long as the Plan or any amendment thereto is in effect,
the Distributor shall inform the Board of Directors of the commissions
(including trailer commissions) and account servicing fees to be paid by
the Distributor to account executives of the Distributor and to
broker-dealers and financial institutions which have selected dealer
agreements with the Distributor. So long as the Plan (or any amendment
thereto) is in effect, at the request of the Board of Directors or any
agent or representative of the Fund, the Distributor shall provide such
additional information as may reasonably be requested concerning the
activities of the Distributor hereunder and the costs incurred in
performing such activities.

8.3 Expenses of distribution with respect to the Class B shares
of the Fund include, among others:

(a) sales commissions (including trailer commissions) paid
to, or on account of, account executives of the
Distributor;

(b) indirect and overhead costs of the Distributor
associated with performance of distribution activities,
including central office and branch expenses;

(c) amounts paid to Prusec for performing services under a
selected dealer agreement between Prusec and the
Distributor for sale of Class B shares of the Fund,
including sales commissions and trailer commissions
paid to, or on account of, agents and indirect and
overhead costs associated with distribution activities;

(d) sales commissions (including trailer commissions) paid
to, or on account of, broker-dealers and financial
institutions (other than Prusec) which have entered
into selected dealer agreements with the Distributor
with respect to Class B shares of the Fund;

(e) amounts paid to, or an account of, account executives
of the Distributor or of other broker-dealers or
financial institutions for

<PAGE>

personal service and/or the maintenance of shareholder
accounts; and

(f) advertising for the Fund in various forms through any
available medium, including the cost of printing and
mailing Fund Prospectuses, and periodic financial
reports and sales literature to persons other than
current shareholders of the Fund.

Indirect and overhead costs referred to in clauses (b) and (c) of
the foregoing sentence include (i) lease expenses, (ii) salaries and
benefits of personnel including operations and sales support personnel,
(iii) utility expenses, (iv) communications expenses, (v) sales promotion
expenses, (vi) expenses of postage, stationery and supplies and (vii)
general overhead.

Section 9. Allocation of Expenses
----------------------

9.1 The Fund shall bear all costs and expenses of the continuous
offering of its Class B shares, including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required Registration Statements and/or Prospectuses under the Investment
Company Act or the Securities Act, and preparing and mailing annual and
periodic reports and proxy materials to shareholders (including but not
limited to the expense of setting in type any such Registration Statements,
Prospectuses, annual or periodic reports or proxy materials). The Fund
shall also bear the cost of expenses of qualification of the Class B shares
for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United
States or other jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 5.4 hereof and the cost and expense payable
to each such state for continuing qualification therein until the Fund
decides to discontinue such qualification pursuant to Section 5.4 hereof.
As set forth in Section 8 above, the Fund shall also bear the expenses it
assumes pursuant to the Plan with respect to Class B shares, so long as the
Plan is in effect.

Section 10. Indemnification
---------------

10.1 The Fund agrees to indemnify, defend and hold the
Distributor, its officers and Directors and any person who controls the
Distributor within the meaning of Section 15 of the Securities Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, Directors or any such
controlling person may incur under the Securities Act, or under common law
or otherwise, arising out of or based upon any untrue statement of a

<PAGE>

material fact contained in the Registration Statement or Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either thereof or necessary to make the statements
in either thereof not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by
the Distributor to the Fund for use in the Registration Statement or
Prospectus; provided, however, that this indemnity agreement shall not
inure to the benefit of any such officer, Director or controlling person
unless a court of competent jurisdiction shall determine in a final
decision on the merits, that the person to be indemnified was not liable by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of
such a decision, a reasonable determination, based upon a review of the
facts, that the indemnified person was not liable by reason of disabling
conduct, by (a) a vote of a majority of a quorum of Directors who are
neither "interested persons" of the Fund as defined in Section 2(a)(19) of
the Investment Company Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any such
controlling person as aforesaid is expressly conditioned upon the Fund's
being promptly notified of any action brought against the Distributor, its
officers or Directors, or any such controlling person, such notification to
be given in writing addressed to the Fund at its principal business office.
The Fund agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or Directors in connection with the issue and sale of any Class B
shares.

10.2 The Distributor agrees to indemnify, defend and hold the
Fund, its officers and Directors and any person who controls the Fund, if
any, within the meaning of Section 15 of the Securities Act, free and
harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending against such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Fund, its officers and Directors or any such
controlling person may incur under the Securities Act or under common law
or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its Directors or officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or
Prospectus or necessary to

<PAGE>

make such information not misleading. The Distributor's agreement to
indemnify the Fund, its officers and Directors and any such controlling
person as aforesaid, is expressly conditioned upon the Distributor's being
promptly notified of any action brought against the Fund, its officers and
Directors or any such controlling person, such notification to be given to
the Distributor in writing at its principal business office.

Section 11. Duration and Termination of this Agreement
------------------------------------------

11.1 This Agreement shall become effective as of the date first
above written and shall remain in force for two years from the date hereof
and thereafter, but only so long as such continuance is specifically
approved at least annually by (a) the Board of Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Class B
shares of the Fund, and (b) by the vote of a majority of those Directors
who are not parties to this Agreement or interested persons of any such
parties and who have no direct or indirect financial interest in this
Agreement or in the operation of the Fund's Plan or in any agreement
related thereto (Rule 12b-1 Directors), cast in person at a meeting called
for the purpose of voting upon such approval.

11.2 This Agreement may be terminated at any time, without the
payment of any penalty, by a majority of the Rule 12b-1 Directors or by
vote of a majority of the outstanding voting securities of the Class B
shares of the Fund, or by the
Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.

11.3 The terms "affiliated person," "assignment," "interested
person" and "vote of a majority of the outstanding voting securities," when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act.

Section 12. Amendments to this Agreement
----------------------------

This Agreement may be amended by the parties only if such
amendment is specifically approved by (a) the Board of Directors of the
Fund, or by the vote of a majority of the outstanding voting securities of
the Class B shares of the Fund, and (b) by the vote of a majority of the
Rule 12b-1 Board of Directors cast in person at a meeting called for the
purpose of voting on such amendment.

Section 13. Governing Law
-------------

The provisions of this Agreement shall be construed and
interpreted in accordance with the laws of the State of New York as at the
time in effect and the applicable provisions of the Investment Company Act.
To the extent that the applicable law of the State of New York, or any of
the provisions herein, conflict

<PAGE>

with the applicable provisions of the Investment Company Act, the latter
shall control.

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.

Prudential Securities
Incorporated

By: /s/ Robert F. Gunia
-----------------------
Robert F. Gunia
Senior Vice President

Prudential Pacific Growth Fund, Inc.

By: /s/ Richard A. Redeker
-----------------------
Richard A. Redeker
President

PRUDENTIAL PACIFIC GROWTH FUND, INC.

Distribution Agreement
(Class C Shares)
----------------

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act
of 1940, as amended (the Investment Company Act), as a diversified, open-
end, management investment company and it is in the interest of the Fund to
offer its Class C shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business
of selling shares of registered investment companies either directly or
through other broker-dealers;

WHEREAS, the Fund and the Distributor wish to enter into an
agreement with each other, with respect to the continuous offering of the
Fund's Class C shares from and after the date hereof in order to promote
the growth of the Fund and facilitate the distribution of its Class C
shares; and

WHEREAS, the Fund has adopted a distribution and service plan
pursuant to Rule 12b-1 under the Investment Company Act (the Plan)
authorizing payments by the Fund to the Distributor with respect to the
distribution of Class C shares of the Fund and the maintenance of Class C
shareholder accounts.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor
------------------------------

The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Class C shares of the Fund to sell Class
C shares to the public on behalf of the Fund and the Distributor hereby
accepts such appointment and agrees to act hereunder. The Fund hereby
agrees during the term of this Agreement to sell Class C shares of the Fund
through the Distributor on the terms and conditions set forth below.

Section 2. Exclusive Nature of Duties
--------------------------

The Distributor shall be the exclusive representative of the Fund
to act as principal underwriter and distributor of the Fund's Class C
shares, except that:

<PAGE>

2.1 The exclusive rights granted to the Distributor to sell
Class C shares of the Fund shall not apply to Class C shares of the Fund
issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all) the
assets or the outstanding shares of any such company by the Fund.

2.2 Such exclusive rights shall not apply to Class C shares
issued by the Fund pursuant to reinvestment of dividends or capital gains
distributions.

2.3 Such exclusive rights shall not apply to Class C shares
issued by the Fund pursuant to the reinstatement privilege afforded
redeeming shareholders.

2.4 Such exclusive rights shall not apply to purchases made
through the Fund's transfer and dividend disbursing agent in the manner set
forth in the currently effective Prospectus of the Fund. The term
"Prospectus" shall mean the Prospectus and Statement of Additional
Information included as part of the Fund's Registration Statement, as such
Prospectus and Statement of Additional Information may be amended or
supplemented from time to time, and the term "Registration Statement" shall
mean the Registration Statement filed by the Fund with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
amended (the Securities Act), and the Investment Company Act, as such
Registration Statement is amended from time to time.

Section 3. Purchase of Class C Shares from the Fund
----------------------------------------

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Class C shares needed, but not more than the Class
C shares needed (except for clerical errors in transmission) to fill
unconditional orders for Class C shares placed with the Distributor by
investors or registered and qualified securities dealers and other
financial institutions (selected dealers).

3.2 The Class C shares shall be sold by the Distributor on
behalf of the Fund and delivered by the Distributor or selected dealers, as
described in Section 6.4 hereof, to investors at the offering price as set
forth in the Prospectus.

3.3 The Fund shall have the right to suspend the sale of its
Class C shares at times when redemption is suspended pursuant to the
conditions in Section 4.3 hereof or at such other times as may be
determined by the Board of Directors. The Fund shall also have the right
to suspend the sale of its Class C shares if a banking moratorium shall
have been declared by federal or New York authorities.

<PAGE>

3.4 The Fund, or any agent of the Fund designated in writing by
the Fund, shall be promptly advised of all purchase orders for Class C
shares received by the Distributor. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily or without reasonable
cause refuse to accept or confirm orders for the purchase of Class C
shares. The Fund (or its agent) will confirm orders upon their receipt,
will make appropriate book entries and upon receipt by the Fund (or its
agent) of payment therefor, will deliver deposit receipts for such Class C
shares pursuant to the instructions of the Distributor. Payment shall be
made to the Fund in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Fund (or its agent).

Section 4. Repurchase or Redemption of Class C Shares by the Fund
------------------------------------------------------

4.1 Any of the outstanding Class C shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the
Class C shares so tendered in accordance with its Articles of Incorporation
as amended from time to time, and in accordance with the applicable
provisions of the Prospectus. The price to be paid to redeem or repurchase
the Class C shares shall be equal to the net asset value determined as set
forth in the Prospectus. All payments by the Fund hereunder shall be made
in the manner set forth in Section 4.2 below.

4.2 The Fund shall pay the total amount of the redemption price
as defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh day subsequent to its having received
the notice of redemption in proper form. The proceeds of any redemption of
Class C shares shall be paid by the Fund as follows: (a) any applicable
contingent deferred sales charge shall be paid to the Distributor and (b)
the balance shall be paid to or for the account of the redeeming
shareholder, in each case in accordance with applicable provisions of the
Prospectus.

4.3 Redemption of Class C shares or payment may be suspended at
times when the New York Stock Exchange is closed for other than customary
weekends and holidays, when trading on said Exchange is restricted, when an
emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets,
or during any other period when the Securities and Exchange Commission, by
order, so permits.

<PAGE>

Section 5. Duties of the Fund
------------------

5.1 Subject to the possible suspension of the sale of Class C
shares as provided herein, the Fund agrees to sell its Class C shares so
long as it has Class C shares available.

5.2 The Fund shall furnish the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of Class
C shares, and this shall include one certified copy, upon request by the
Distributor, of all financial statements prepared for the Fund by
independent public accountants. The Fund shall make available to the
Distributor such number of copies of its Prospectus and annual and interim
reports as the Distributor shall reasonably request.

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Directors and the shareholders, all
necessary action to fix the number of authorized Class C shares and such
steps as may be necessary to register the same under the Securities Act, to
the end that there will be available for sale such number of Class C shares
as the Distributor reasonably may expect to sell. The Fund agrees to file
from time to time such amendments, reports and other documents as may be
necessary in order that there will be no untrue statement of a material
fact in the Registration Statement, or necessary in order that there will
be no omission to state a material fact in the Registration Statement which
omission would make the statements therein misleading.

5.4 The Fund shall use its best efforts to qualify and maintain
the qualification of any appropriate number of its Class C shares for sales
under the securities laws of such states as the Distributor and the Fund
may approve; provided that the Fund shall not be required to amend its
Articles of Incorporation or By-Laws to comply with the laws of any state,
to maintain an office in any state, to change the terms of the offering of
its Class C shares in any state from the terms set forth in its
Registration Statement, to qualify as a foreign corporation in any state or
to consent to service of process in any state other than with respect to
claims arising out of the offering of its Class C shares. Any such
qualification may be withheld, terminated or withdrawn by the Fund at any
time in its discretion. As provided in Section 9.1 hereof, the expense of
qualification and maintenance of qualification shall be borne by the Fund.
The Distributor shall furnish such information and other material relating
to its affairs and activities as may be required by the Fund in connection
with such qualifications.

<PAGE>

Section 6. Duties of the Distributor
-------------------------

6.1 The Distributor shall devote reasonable time and effort to
effect sales of Class C shares of the Fund, but shall not be obligated to
sell any specific number of Class C shares. Sales of the Class C shares
shall be on the terms described in the Prospectus. The Distributor may
enter into like arrangements with other investment companies. The
Distributor shall compensate the selected dealers as set forth in the
Prospectus.

6.2 In selling the Class C shares, the Distributor shall use its
best efforts in all respects duly to conform with the requirements of all
federal and state laws relating to the sale of such securities. Neither
the Distributor nor any selected dealer nor any other person is authorized
by the Fund to give any information or to make any representations, other
than those contained in the Registration Statement or Prospectus and any
sales literature approved by appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with
the requirements of the National Association of Securities Dealers, Inc.
(NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and
other financial institutions of its choice for the sale of Class C shares,
provided that the Fund shall approve the forms of such agreements. Within
the United States, the Distributor shall offer and sell Class C shares only
to such selected dealers as are members in good standing of the NASD.
Class C shares sold to selected dealers shall be for resale by such dealers
only at the offering price determined as set forth in the Prospectus.

Section 7. Payments to the Distributor
---------------------------

The Distributor shall receive and may retain any contingent
deferred sales charge which is imposed with respect to repurchases and
redemptions of Class C shares as set forth in the Prospectus, subject to
the limitations of Article III, Section 26 of the NASD Rules of Fair
Practice. Payment of these amounts to the Distributor is not contingent
upon the adoption or continuation of the Plan.

Section 8. Payment of the Distributor under the Plan
-----------------------------------------

<PAGE>

the average daily net assets of the Class C shares of the Fund. Amounts
payable under the Plan shall be accrued daily and paid monthly or at such
other intervals as the Directors may determine. Amounts payable under the
Plan shall be subject to the limitations of Article III, Section 26 of the
NASD Rules of Fair Practice.

8.3 Expenses of distribution with respect to the Class C shares
of the Fund include, among others:

(a) sales commissions (including trailer commissions) paid
to, or on account of, account executives of the
Distributor;

(b) indirect and overhead costs of the Distributor
associated with performance of distribution activities,
including central office and branch expenses;

(c) amounts paid to Prusec for performing services under a
selected dealer agreement between Prusec and the
Distributor for sale of Class C shares of the Fund,
including sales commissions and trailer commissions
paid to, or on account of, agents and indirect and
overhead costs associated with distribution activities;

(e) amounts paid to, or an account of, account executives
of the Distributor or of other broker-dealers or
financial institutions for

<PAGE>

personal service and/or the maintenance of shareholder
accounts; and

Section 9. Allocation of Expenses
----------------------

9.1 The Fund shall bear all costs and expenses of the continuous
offering of its Class C shares, including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required Registration Statements and/or Prospectuses under the Investment
Company Act or the Securities Act, and preparing and mailing annual and
periodic reports and proxy materials to shareholders (including but not
limited to the expense of setting in type any such Registration Statements,
Prospectuses, annual or periodic reports or proxy materials). The Fund
shall also bear the cost of expenses of qualification of the Class C shares
for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United
States or other jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 5.4 hereof and the cost and expense payable
to each such state for continuing qualification therein until the Fund
decides to discontinue such qualification pursuant to Section 5.4 hereof.
As set forth in Section 8 above, the Fund shall also bear the expenses it
assumes pursuant to the Plan with respect to Class C shares, so long as the
Plan is in effect.

Section 10. Indemnification
---------------

<PAGE>

material fact contained in the Registration Statement or Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either thereof or necessary to make the statements
in either thereof not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by
the Distributor to the Fund for use in the Registration Statement or
Prospectus; provided, however, that this indemnity agreement shall not
inure to the benefit of any such officer, Director or controlling person
unless a court of competent jurisdiction shall determine in a final
decision on the merits, that the person to be indemnified was not liable by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of
such a decision, a reasonable determination, based upon a review of the
facts, that the indemnified person was not liable by reason of disabling
conduct, by (a) a vote of a majority of a quorum of Directors who are
neither "interested persons" of the Fund as defined in Section 2(a)(19) of
the Investment Company Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any such
controlling person as aforesaid is expressly conditioned upon the Fund's
being promptly notified of any action brought against the Distributor, its
officers or Directors, or any such controlling person, such notification to
be given in writing addressed to the Fund at its principal business office.
The Fund agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or Directors in connection with the issue and sale of any Class C
shares.

10.2 The Distributor agrees to indemnify, defend and hold the
Fund, its officers and Directors and any person who controls the Fund, if
any, within the meaning of Section 15 of the Securities Act, free and
harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending against such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Fund, its officers and Directors or any such
controlling person may incur under the Securities Act or under common law
or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its Directors or officers or such controlling person
resulting from such claims or demands shall arise out of or be based upon
any alleged untrue statement of a material fact contained in information
furnished in writing by the Distributor to the Fund for use in the
Registration Statement or Prospectus or shall arise out of or be based upon
any alleged omission to state a material fact in connection with such
information required to be stated in the Registration Statement or
Prospectus or necessary to

<PAGE>

Section 11. Duration and Termination of this Agreement
------------------------------------------

11.1 This Agreement shall become effective as of the date first
above written and shall remain in force for two years from the date hereof
and thereafter, but only so long as such continuance is specifically
approved at least annually by (a) the Board of Directors of the Fund, or by
the vote of a majority of the outstanding voting securities of the Class C
shares of the Fund, and (b) by the vote of a majority of those Directors
who are not parties to this Agreement or interested persons of any such
parties and who have no direct or indirect financial interest in this
Agreement or in the operation of the Fund's Plan or in any agreement
related thereto (Rule 12b-1 Directors), cast in person at a meeting called
for the purpose of voting upon such approval.

11.2 This Agreement may be terminated at any time, without the
payment of any penalty, by a majority of the Rule 12b-1 Directors or by
vote of a majority of the outstanding voting securities of the Class C
shares of the Fund, or by the
Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.

Section 12. Amendments to this Agreement
----------------------------

This Agreement may be amended by the parties only if such
amendment is specifically approved by (a) the Board of Directors of the
Fund, or by the vote of a majority of the outstanding voting securities of
the Class C shares of the Fund, and (b) by the vote of a majority of the
Rule 12b-1 Board of Directors cast in person at a meeting called for the
purpose of voting on such amendment.

Section 13. Governing Law
-------------

<PAGE>

with the applicable provisions of the Investment Company Act, the latter
shall control.

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.

Prudential Securities
Incorporated

By: /s/ Robert F. Gunia
-----------------------
Robert F. Gunia
Senior Vice President

Prudential Pacific Growth Fund, Inc.

By: /s/ Richard A. Redeker
-----------------------
Richard A. Redeker
President

Exhibit 6(g)

[FUND NAME]

Form of
Distribution Agreement
(Class Z Shares)
----------------

Agreement made as of _______, 1995, between [FUND NAME], a
Maryland Corporation/Massachusetts business trust (the Fund) and Prudential
Securities Incorporated, a Delaware Corporation (the Distributor).

WITNESSETH

WHEREAS, the Fund is registered under the Investment Company Act
of 1940, as amended (the Investment Company Act), as a [diversified/non-
diversified], open-end, management investment company and it is in the
interest of the Fund to offer its Class Z shares for sale continuously;

WHEREAS, the Distributor is a broker-dealer registered under the
Securities Exchange Act of 1934, as amended, and is engaged in the business
of selling shares of registered investment companies either directly or
through other broker-dealers; and

WHEREAS, the Fund and the Distributor wish to enter into an
agreement with each other, with respect to the continuous offering of the
Fund's Class Z shares from and after the date hereof in order to promote
the growth of the Fund and facilitate the distribution of its Class Z
shares.

NOW, THEREFORE, the parties agree as follows:

Section 1. Appointment of the Distributor
------------------------------

The Fund hereby appoints the Distributor as the principal
underwriter and distributor of the Class Z shares of the Fund to sell Class
Z shares to the public on behalf of the Fund and the Distributor hereby
accepts such appointment and agrees to act hereunder. The Fund hereby
agrees during the term of this Agreement to sell Class Z shares of the Fund
through the Distributor on the terms and conditions set forth below.

Section 2. Exclusive Nature of Duties
--------------------------

The Distributor shall be the exclusive representative of the Fund
to act as principal underwriter and distributor of the Fund's Class Z
shares, except that:

2.1 The exclusive rights granted to the Distributor to sell
Class Z shares of the Fund shall not apply to Class Z shares of the Fund
issued in connection with the merger or consolidation of any other
investment company or personal holding company with the Fund or the
acquisition by purchase or otherwise of all (or substantially all) of the
assets or the outstanding shares of any such company by the Fund.

<PAGE>

2.2 Such exclusive rights shall not apply to Class Z shares
issued by the Fund pursuant to reinvestment of dividends or capital gains
distributions.

2.3 Such exclusive rights shall not apply to Class Z shares
issued by the Fund pursuant to the reinstatement privilege afforded
redeeming shareholders.

2.4 Such exclusive rights shall not apply to purchases made
through the Fund's transfer and dividend disbursing agent in the manner set
forth in the currently effective Prospectus of the Fund. The term
"Prospectus" shall mean the Prospectus and Statement of Additional
Information included as part of the Fund's Registration Statement, as such
Prospectus and Statement of Additional Information may be amended or
supplemented from time to time, and the term "Registration Statement" shall
mean the Registration Statement filed by the Fund with the Securities and
Exchange Commission and effective under the Securities Act of 1933, as
amended (the Securities Act), and the Investment Company Act, as such
Registration Statement is amended from time to time.

Section 3. Purchase of Class Z Shares from the Fund
----------------------------------------

3.1 The Distributor shall have the right to buy from the Fund on
behalf of investors the Class Z shares needed, but not more than the Class
Z shares needed (except for clerical errors in transmission) to fill
unconditional orders for Class Z shares placed with the Distributor by
investors or registered and qualified securities dealers and other
financial institutions (selected dealers).

3.2 The Class Z shares shall be sold by the Distributor on
behalf of the Fund and delivered by the Distributor or selected dealers, as
described in Section 6.4 hereof, to investors at the offering price as set
forth in the Prospectus.

3.3 The Fund shall have the right to suspend the sale of its
Class Z shares at times when redemption is suspended pursuant to the
conditions in Section 4.3 hereof or at such other times as may be
determined by the Board of Directors/Trustees. The Fund shall also have
the right to suspend the sale of its Class Z shares if a banking moratorium
shall have been declared by federal or New York authorities.

3.4 The Fund, or any agent of the Fund designated in writing by
the Fund, shall be promptly advised of all purchase orders for Class Z
shares received by the Distributor. Any order may be rejected by the Fund;
provided, however, that the Fund will not arbitrarily or without reasonable
cause refuse to accept or confirm orders for the purchase of Class Z
shares. The Fund (or its agent) will confirm orders upon their receipt,
will make appropriate book entries and upon receipt by the Fund (or its

<PAGE>

agent) of payment therefor, will deliver deposit receipts for such Class Z
shares pursuant to the instructions of the Distributor. Payment shall be
made to the Fund in New York Clearing House funds or federal funds. The
Distributor agrees to cause such payment and such instructions to be
delivered promptly to the Fund (or its agent).

Section 4. Repurchase or Redemption of Class Z Shares by the Fund
------------------------------------------------------

4.1 Any of the outstanding Class Z shares may be tendered for
redemption at any time, and the Fund agrees to repurchase or redeem the
Class Z shares so tendered in accordance with its Articles of
Incorporation/Declaration of Trust as amended from time to time, and in
accordance with the applicable provisions of the Prospectus. The price to
be paid to redeem or repurchase the Class Z shares shall be equal to the
net asset value determined as set forth in the Prospectus. All payments by
the Fund hereunder shall be made in the manner set forth in Section 4.2
below.

4.2 The Fund shall pay the total amount of the redemption price
as defined in the above paragraph pursuant to the instructions of the
Distributor on or before the seventh day subsequent to its having received
the notice of redemption in proper form. The proceeds of any redemption of
Class Z shares shall be paid by the Fund to or for the account of the
redeeming shareholder, in each case in accordance with applicable
provisions of the Prospectus.

4.3 Redemption of Class Z shares or payment may be suspended at
times when the New York Stock Exchange is closed for other than customary
weekends and holidays, when trading on said Exchange is restricted, when an
emergency exists as a result of which disposal by the Fund of securities
owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund fairly to determine the value of its net assets,
or during any other period when the Securities and Exchange Commission, by
order, so permits.

Section 5. Duties of the Fund
------------------

5.1 Subject to the possible suspension of the sale of Class Z
shares as provided herein, the Fund agrees to sell its Class Z shares so
long as it has Class Z shares available.

5.2 The Fund shall furnish the Distributor copies of all
information, financial statements and other papers which the Distributor
may reasonably request for use in connection with the distribution of Class
Z shares, and this shall include one certified copy, upon request by the
Distributor, of all financial statements examined for the Fund by
independent public accountants. The Fund shall make available to the
Distributor such number of copies of its Prospectus and annual and interim
reports as the

<PAGE>

Distributor shall reasonably request.

5.3 The Fund shall take, from time to time, but subject to the
necessary approval of the Board of Directors/Trustees and the shareholders,
all necessary action to fix the number of authorized Class Z shares and
such steps as may be necessary to register the same under the Securities
Act, to the end that there will be available for sale such number of Class
Z shares as the Distributor reasonably may expect to sell. The Fund agrees
to file from time to time such amendments, reports and other documents as
may be necessary in order that there will be no untrue statement of a
material fact in the Registration Statement, or necessary in order that
there will be no omission to state a material fact in the Registration
Statement which omission would make the statements therein misleading.

5.4 The Fund shall use its best efforts to qualify and maintain
the qualification of any appropriate number of its Class Z shares for sales
under the securities laws of such states as the Distributor and the Fund
may approve; provided that the Fund shall not be required to amend its
[Articles of Incorporation/Declaration of Trust] or By-Laws to comply with
the laws of any state, to maintain an office in any state, to change the
terms of the offering of its Class Z shares in any state from the terms set
forth in its Registration Statement, to qualify as a foreign corporation in
any state or to consent to service of process in any state other than with
respect to claims arising out of the offering of its Class Z shares. Any
such qualification may be withheld, terminated or withdrawn by the Fund at
any time in its discretion. As provided in Section 7.1 hereof, the expense
of qualification and maintenance of qualification shall be borne by the
Fund. The Distributor shall furnish such information and other material
relating to its affairs and activities as may be required by the Fund in
connection with such qualifications.

Section 6. Duties of the Distributor
-------------------------

6.1 The Distributor shall devote reasonable time and effort to
effect sales of Class Z shares of the Fund, but shall not be obligated to
sell any specific number of Class Z shares. Sales of the Class Z shares
shall be on the terms described in the Prospectus. The Distributor may
enter into like arrangements with other investment companies. The
Distributor shall compensate the selected dealers as set forth in the
Prospectus.

6.2 In selling the Class Z shares, the Distributor shall use its
best efforts in all respects duly to conform with the requirements of all
federal and state laws relating to the sale of such securities. Neither
the Distributor nor any selected dealer nor any other person is authorized
by the Fund to give any information or to make any representations, other
than those contained in the Registration Statement or Prospectus and any
sales

<PAGE>

literature approved by appropriate officers of the Fund.

6.3 The Distributor shall adopt and follow procedures for the
confirmation of sales to investors and selected dealers, the collection of
amounts payable by investors and selected dealers on such sales and the
cancellation of unsettled transactions, as may be necessary to comply with
the requirements of the National Association of Securities Dealers, Inc.
(NASD).

6.4 The Distributor shall have the right to enter into selected
dealer agreements with registered and qualified securities dealers and
other financial institutions of its choice for the sale of Class Z shares,
provided that the Fund shall approve the forms of such agreements. Within
the United States, the Distributor shall offer and sell Class Z shares only
to such selected dealers as are members in good standing of the NASD.
Class Z shares sold to selected dealers shall be for resale by such dealers
only at the offering price determined as set forth in the Prospectus.

Section 7. Allocation of Expenses
----------------------

7.1 The Fund shall bear all costs and expenses of the continuous
offering of its Class Z shares, including fees and disbursements of its
counsel and auditors, in connection with the preparation and filing of any
required Registration Statements and/or Prospectuses under the Investment
Company Act or the Securities Act, and preparing and mailing annual and
periodic reports and proxy materials to shareholders (including but not
limited to the expense of setting in type any such Registration Statements,
Prospectuses, annual or periodic reports or proxy materials). The Fund
shall also bear the cost of and expense of qualification of the Class Z
shares for sale, and, if necessary or advisable in connection therewith, of
qualifying the Fund as a broker or dealer, in such states of the United
States or other jurisdictions as shall be selected by the Fund and the
Distributor pursuant to Section 5.4 hereof and the cost and expense payable
to each such state for continuing qualification therein until the Fund
decides to discontinue such qualification pursuant to Section 5.4 hereof.

Section 8. Indemnification
---------------

8.1 The Fund agrees to indemnify, defend and hold the
Distributor, its officers and Directors and any person who controls the
Distributor within the meaning of Section 15 of the Securities Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending such claims,
demands or liabilities and any counsel fees incurred in connection
therewith) which the Distributor, its officers, Directors or any such
controlling person may incur under the Securities Act, or under common law
or otherwise, arising out of or based upon any untrue statement of a

<PAGE>

material fact contained in the Registration Statement or Prospectus or
arising out of or based upon any alleged omission to state a material fact
required to be stated in either thereof or necessary to make the statements
in either thereof not misleading, except insofar as such claims, demands,
liabilities or expenses arise out of or are based upon any such untrue
statement or omission or alleged untrue statement or omission made in
reliance upon and in conformity with information furnished in writing by
the Distributor to the Fund for use in the Registration Statement or
Prospectus; provided, however, that this indemnity agreement shall not
inure to the benefit of any such officer, Director or controlling person
unless a court of competent jurisdiction shall determine in a final
decision on the merits, that the person to be indemnified was not liable by
reason of willful misfeasance, bad faith or gross negligence in the
performance of its duties, or by reason of its reckless disregard of its
obligations under this Agreement (disabling conduct), or, in the absence of
such a decision, a reasonable determination, based upon a review of the
facts, that the indemnified person was not liable by reason of disabling
conduct, by (a) a vote of a majority of a quorum of Directors who are
neither "interested persons" of the Fund as defined in Section 2(a)(19) of
the Investment Company Act nor parties to the proceeding, or (b) an
independent legal counsel in a written opinion. The Fund's agreement to
indemnify the Distributor, its officers and Directors and any such
controlling person as aforesaid is expressly conditioned upon the Fund's
being promptly notified of any action brought against the Distributor, its
officers or Directors, or any such controlling person, such notification to
be given in writing addressed to the Fund at its principal business office.
The Fund agrees promptly to notify the Distributor of the
commencement of any litigation or proceedings against it or any of its
officers or Directors in connection with the issue and sale of any Class Z
shares.

8.2 The Distributor agrees to indemnify, defend and hold the
Fund, its officers and Directors/Trustees and any person who controls the
Fund, if any, within the meaning of Section 15 of the Securities Act, free
and harmless from and against any and all claims, demands, liabilities and
expenses (including the cost of investigating or defending against such
claims, demands or liabilities and any counsel fees incurred in connection
therewith) which the Fund, its officers and Directors/Trustees or any such
controlling person may incur under the Securities Act or under common law
or otherwise, but only to the extent that such liability or expense
incurred by the Fund, its Directors/Trustees or officers or such
controlling person resulting from such claims or demands shall arise out of
or be based upon any alleged untrue statement of a material fact contained
in information furnished in writing by the Distributor to the Fund for use
in the Registration Statement or Prospectus or shall arise out of or be
based upon any alleged omission to state a material fact in connection with
such information required to be stated in the Registration Statement or

<PAGE>

Prospectus or necessary to make such information not misleading. The
Distributor's agreement to indemnify the Fund, its officers and
Directors/Trustees and any such controlling person as aforesaid, is
expressly conditioned upon the Distributor's being promptly notified of any
action brought against the Fund, its officers and Directors/Trustees or any
such controlling person, such notification to be given to the Distributor
in writing at its principal business office.

Section 9. Duration and Termination of this Agreement
------------------------------------------

9.1 This Agreement shall become effective as of the date first
above written and shall remain in force for two years from the date hereof
and thereafter, but only so long as such continuance is specifically
approved at least annually by (a) the Board of Directors/Trustees of the
Fund, or by the vote of a majority of the outstanding voting securities of
the Class Z shares of the Fund and (b) by the vote of a majority of those
Directors/Trustees who are not parties to this Agreement or interested
persons of any such parties and who have no direct or indirect financial
interest in this Agreement.

9.2 This Agreement may be terminated at any time, without the
payment of any penalty, by a majority of the Rule 12b-1 Directors/Trustees
or by vote of a majority of the outstanding voting securities of the Class
Z shares of the Fund, or by the
Distributor, on sixty (60) days' written notice to the other party. This
Agreement shall automatically terminate in the event of its assignment.

9.3 The terms "affiliated person," "assignment," "interested
person" and "vote of a majority of the outstanding voting securities," when
used in this Agreement, shall have the respective meanings specified in the
Investment Company Act.

Section 10. Amendments to this Agreement
----------------------------

This Agreement may be amended by the parties only if such
amendment is specifically approved by the Board of Directors/Trustees of
the Fund, or by the vote of a majority of the outstanding voting securities
of the Class Z shares of the Fund.

Section 11. Governing Law
-------------

<PAGE>

[Section 11. Liabilities of the Fund
-----------------------

The name ________________________ is the designation of the Trustees
under a Declaration of Trust, dated ________, 19__, as thereafter amended,
and all persons dealing with the Fund must look solely to the property of
the Fund for the enforcement of any claims against the Fund as neither the
Trustees, officers, agents or shareholders assume any personal liability
for obligations entered into on behalf of the Fund.]

IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year above written.

Prudential Securities
Incorporated

By:
----------------------
Robert F. Gunia
Senior Vice President

[FUND NAME]

By:
----------------------
Richard A. Redeker
President

[18f3]cld-mod.agr

Exhibit 8(b)

FORM OF
AMENDMENT TO CUSTODIAN CONTRACT

Agreement made by and between State Street Bank and Trust Company (the
"Custodian") and (the "Fund").

WHEREAS, the Custodian and the Fund are parties to a custodian contract
dated (the "Custodian Contract") governing the terms and conditions
under which the Custodian maintains custody of the securities and other
assets of the Fund; and

WHEREAS, the Custodian and the Fund desire to amend the terms and
conditions under which the Custodian maintains the Fund's securities and
other non-cash property in the custody of certain foreign sub-custodians in
conformity with the requirements of Rule 17f-5 under the Investment Company
Act of 1940, as amended;

NOW THEREFORE, in consideration of the premises and covenants contained
herein, the Custodian and the Fund hereby amend the Custodian Contract by the
addition of the following terms and provisions;

1. Notwithstanding any provisions to the contrary set forth in the
Custodian Contract, the Custodian may hold securities and other non-cash
property for all of its customers, including the Fund, with a foreign sub-
custodian in a single account that is identified as belonging to the
Custodian for the benefit of its customers, provided however, that (i) the
-------- -------
records of the Custodian with respect to securities and other non-cash
property of the Fund which are maintained in such account shall identify by
book-entry those securities and other non-cash property belonging to the Fund
and (ii) the Custodian shall require that securities and other non-cash
property so held by the foreign sub-custodian be held separately from any
assets of the foreign sub-custodian or of others.

2. Except as specifically superseded or modified herein, the terms and
provisions of the Custodian Contract shall continue to apply with full force
and effect.

IN WITNESS WHEREOF, each of the parties has caused this instrument to be
executed as a sealed instrument in its name and behalf by its duly authorized
representative this day of , 1995.

By:
-------------------------------

Title:
-------------------------------

STATE STREET BANK AND TRUST COMPANY

By:
-------------------------------

Title:
-------------------------------

Exhibit 11

CONSENT OF INDEPENDENT AUDITORS

We consent to the use in Post-Effective Amendment No. 6 to Registration
Statement No. 33-42391 of Prudential Pacific Growth Fund, Inc. of our report
dated December 16, 1994, appearing in the Statement of Additional
Information, which is a part of such Registration Statement, and to the
references to us under the headings "Financial Highlights" in the Prospectus,
which is a part of such Registration Statement, and "Custodian, Transfer and
Dividend Disbursing Agent and Independent Accountants" in the Statement of
Additional Information.

/s/ Deloitte & Touche LLP

Deloitte & Touche LLP
New York, New York
October 31, 1995

<ARTICLE> 6
<CIK> 0000878535
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC.
<SERIES>
<NUMBER> 001
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC. (CLASS A

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
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<INVESTMENTS-AT-VALUE> 441,503,178
<RECEIVABLES> 13,256,994
<ASSETS-OTHER> 14,037,643
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 468,797,815
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,975,778
<TOTAL-LIABILITIES> 5,975,778
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 451,702,657
<SHARES-COMMON-STOCK> 31,258,185
<SHARES-COMMON-PRIOR> 33,569,825
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,719,951)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,839,331
<NET-ASSETS> 462,822,037
<DIVIDEND-INCOME> 3,652,694
<INTEREST-INCOME> 301,345
<OTHER-INCOME> 0
<EXPENSES-NET> 4,976,011
<NET-INVESTMENT-INCOME> (1,021,972)
<REALIZED-GAINS-CURRENT> (22,029,253)
<APPREC-INCREASE-CURRENT> (33,784,034)
<NET-CHANGE-FROM-OPS> (56,835,259)
<EQUALIZATION> 125,758
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (3,361,381)
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<NUMBER-OF-SHARES-SOLD> 416,535,662
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<NET-CHANGE-IN-ASSETS> (96,765,807)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,566,897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,765,501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,976,011
<AVERAGE-NET-ASSETS> 94,189,000
<PER-SHARE-NAV-BEGIN> 16.90
<PER-SHARE-NII> 0.02
<PER-SHARE-GAIN-APPREC> (1.78)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.10)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 15.04
<EXPENSE-RATIO> 1.51
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<CIK> 0000878535
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC.
<SERIES>
<NUMBER> 002
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC. (CLASS B

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 408,568,759
<INVESTMENTS-AT-VALUE> 441,503,178
<RECEIVABLES> 13,256,994
<ASSETS-OTHER> 14,037,643
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 468,797,815
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,975,778
<TOTAL-LIABILITIES> 5,975,778
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 451,702,657
<SHARES-COMMON-STOCK> 31,258,185
<SHARES-COMMON-PRIOR> 33,569,825
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,719,951)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,839,331
<NET-ASSETS> 462,822,037
<DIVIDEND-INCOME> 3,652,694
<INTEREST-INCOME> 301,345
<OTHER-INCOME> 0
<EXPENSES-NET> 4,976,011
<NET-INVESTMENT-INCOME> (1,021,972)
<REALIZED-GAINS-CURRENT> (22,029,253)
<APPREC-INCREASE-CURRENT> (33,784,034)
<NET-CHANGE-FROM-OPS> (56,835,259)
<EQUALIZATION> 125,758
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (3,361,381)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 416,535,662
<NUMBER-OF-SHARES-REDEEMED> (456,399,897)
<SHARES-REINVESTED> 3,169,310
<NET-CHANGE-IN-ASSETS> (96,765,807)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,566,897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,765,501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,976,011
<AVERAGE-NET-ASSETS> 379,515,000
<PER-SHARE-NAV-BEGIN> 16.62
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (1.74)
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> (0.10)
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 14.74
<EXPENSE-RATIO> 2.26
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0.00

</TABLE>

<ARTICLE> 6
<CIK> 0000878535
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC.
<SERIES>
<NUMBER> 003
<NAME> PRUDENTIAL PACIFIC GROWTH FUND, INC. (CLASS C

<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> APR-30-1995
<INVESTMENTS-AT-COST> 408,568,759
<INVESTMENTS-AT-VALUE> 441,503,178
<RECEIVABLES> 13,256,994
<ASSETS-OTHER> 14,037,643
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 468,797,815
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 5,975,778
<TOTAL-LIABILITIES> 5,975,778
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 451,702,657
<SHARES-COMMON-STOCK> 31,258,185
<SHARES-COMMON-PRIOR> 33,569,825
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,719,951)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 32,839,331
<NET-ASSETS> 462,822,037
<DIVIDEND-INCOME> 3,652,694
<INTEREST-INCOME> 301,345
<OTHER-INCOME> 0
<EXPENSES-NET> 4,976,011
<NET-INVESTMENT-INCOME> (1,021,972)
<REALIZED-GAINS-CURRENT> (22,029,253)
<APPREC-INCREASE-CURRENT> (33,784,034)
<NET-CHANGE-FROM-OPS> (56,835,259)
<EQUALIZATION> 125,758
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (3,361,381)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 416,535,662
<NUMBER-OF-SHARES-REDEEMED> (456,399,897)
<SHARES-REINVESTED> 3,169,310
<NET-CHANGE-IN-ASSETS> (96,765,807)
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 4,566,897
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,765,501
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,976,011
<AVERAGE-NET-ASSETS> 1,048,000
<PER-SHARE-NAV-BEGIN> 16.62
<PER-SHARE-NII> (0.04)
<PER-SHARE-GAIN-APPREC> (1.74)
<PER-SHARE-DIVIDEND> 0.00
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<RETURNS-OF-CAPITAL> 0.00
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<AVG-DEBT-OUTSTANDING> 0
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</TABLE>

PRUDENTIAL PACIFIC GROWTH FUND,INC.
(the Fund)

PLAN PURSUANT TO RULE 18F-3

The Fund hereby adopts this plan pursuant to Rule 18f-3 under the
Investment Company Act of 1940 (the 1940 Act), setting forth the separate
arrangement and expense allocation of each class of shares. Any material
amendment to this plan is subject to prior approval of the Board of
Directors, including a majority of the independent Directors.

CLASS CHARACTERISTICS

CLASS A SHARES: Class A shares are subject to a high initial sales
- --------------
charge and a distribution and/or service fee pursuant
to Rule 12b-1 under the 1940 Act (Rule 12b-1 fee) not
to exceed .30 of 1% per annum of the average daily net
assets of the class. The initial sales charge is
waived or reduced for certain eligible investors.

CLASS B SHARES: Class B shares are not subject to an initial sales
- --------------
charge but are subject to a high contingent deferred
sales charge (declining by 1% each year) which will be
imposed on certain redemptions and a Rule 12b-1 fee of
not to exceed 1% per annum of the average daily net
assets of the class. The contingent deferred sales
charge is waived for certain eligible investors. Class
B shares automatically convert to Class A shares
approximately seven years after purchase.

CLASS C SHARES: Class C shares are not subject to an initial sales
- --------------
charge but are subject to a low contingent deferred
sales charge (declining by 1% each year) which will be
imposed on certain redemptions and a Rule 12b-1 fee not
to exceed 1% per annum of the average daily net assets
of the class.

Class Z SHARES: Class Z shares are not subject to either an initial or
- --------------
contingent deferred sales charge nor are they subject
to any Rule 12b-1 fee.

INCOME AND EXPENSE ALLOCATIONS

Income, any realized and unrealized capital gains and losses, and
expenses not allocated to a particular class, will be allocated to
each class on the basis of the net asset value of that class in
relation to the net asset value of the Fund.

<PAGE>

DIVIDENDS AND DISTRIBUTIONS

Dividends and other distributions paid by the Fund to each class of
shares, to the extent paid, will be paid on the same day and at the
same time, and will be determined in the same manner and will be in
the same amount, except that the amount of the dividends and other
distributions declared and paid by a particular class may be different
from that paid by another class because of Rule 12b-1 fees and other
expenses borne exclusively by that class.

EXCHANGE PRIVILEGE

Each class of shares is generally exchangeable for the same class of
shares (or the class of shares with similar characteristics), if any,
of the other Prudential Mutual Funds (subject to certain minimum
investment requirements) at relative net asset value without the
imposition of any sales charge.

Class B and Class C shares (which are not subject to a contingent
deferred sales charge) of shareholders who qualify to purchase Class A
shares at net asset value will be automatically exchanged for Class A
shares on a quarterly basis, unless the shareholder elects otherwise.

CONVERSION FEATURES

Class B shares will automatically convert to Class A shares on a
quarterly basis approximately seven years after purchase. Conversions
will be effected at relative net asset value without the imposition of
any additional sales charge.

GENERAL

A. Each class of shares shall have exclusive voting rights on any matter
submitted to shareholders that relates solely to its arrangement and
shall have separate voting rights on any matter submitted to
shareholders in which the interests of one class differ from the
interests of any other class.

B. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the 1940 Act and otherwise, will monitor the
Fund for the existence of any material conflicts among the interests
of its several classes. The Directors, including a majority of the
independent Directors, shall take such action as is reasonably
necessary to eliminate any such conflicts that may develop.
Prudential Mutual Fund Management, Inc., the Fund's Manager, will be
responsible for reporting any potential or existing conflicts to the
Directors.

<PAGE>

C. For purposes of expressing an opinion on the financial statements of
the Fund, the methodology and procedures for calculating the net asset
value and dividends/distributions of the Fund's several classes and
the proper allocation of income and expenses among such classes will
be examined annually by the Fund's independent auditors who, in
performing such examination, shall consider the factors set forth in
the relevant auditing standards adopted, from time to time, by the
American Institute of Certified Public Accountants.

Dated: September 28, 1995

[18f-3]18f3-NMF.pln