MUNIYIELD
FUND, INC.
FUND LOGO
Annual Report
October 31, 1995
This report, including the financial information herein, is
transmitted to the shareholders of MuniYield Fund, Inc. for their
information. It is not a prospectus, circular or representation
intended for use in the purchase of shares of the Fund or any
securities mentioned in the report. Past performance results shown
in this report should not be considered a representation of future
performance. The Fund has leveraged its Common Stock by issuing
Preferred Stock to provide the Common Stock shareholders with a
potentially higher rate of return. Leverage creates risks for Common
Stock shareholders, including the likelihood of greater volatility
of net asset value and market price of shares of the Common Stock,
and the risk that fluctuations in the short-term dividend rates of
the Preferred Stock may affect the yield to Common Stock
shareholders.
<PAGE>
MuniYield Fund, Inc.
Box 9011
Princeton, NJ
08543-9011
MuniYield Fund, Inc.
DEAR SHAREHOLDER
For the year ended October 31, 1995, the Common Stock of MuniYield
Fund, Inc. earned $0.999 per share income dividends, which included
earned and unpaid dividends of $0.086. This represents a net
annualized yield of 6.46%, based on a month-end net asset value of
$15.47 per share. Over the same period, the total investment return
on the Fund's Common Stock was +18.00%, based on a change in per
share net asset value from $14.35 to $15.47, and assuming
reinvestment of $1.001 per share income dividends and $0.219 per
share capital gains distributions.
<PAGE>
For the six-month period ended October 31, 1995, the total
investment return on the Fund's Common Stock was +8.59%, based on a
change in per share net asset value from $14.76 to $15.47, and
assuming reinvestment of $0.491 per share income dividends.
For the six-month period ended October 31, 1995, the Fund's Auction
Market Preferred Stock had an average yield as follows: Series A,
3.51%; Series B, 4.14%; Series C, 3.50%; Series D, 4.09%; and Series
E, 3.53%.
The Environment
After losing momentum through the second calendar quarter of 1995,
it now appears that the US economic expansion has resumed. Gross
domestic product growth for the three months ended September 30 was
reported to be 4.2%, higher than generally expected. September
durable goods orders increased a surprisingly strong 3%, and
existing home sales rose to a near-record level. At the same time,
there is evidence that inflationary pressures remain subdued.
Reflecting the trend of renewed economic growth--and continued good
news on the inflation front--the Federal Reserve Board signaled no
near-term shift in monetary policy following its September meeting.
Thus, official interest rates may not be reduced further in the
immediate future.
Another significant development has been the strengthening of the US
dollar relative to the yen and the Deutschemark. Improving interest
rate differentials favoring the US currency, combined with
coordinated central bank intervention and more positive investor
sentiment, have helped to bolster the dollar in foreign exchange
markets. Other factors that appear to be improving the US dollar's
outlook in the near term are a pick-up in capital flows to the
United States and the prospect of increased capital outflows from
Japan. However, it remains to be seen if the US dollar's
strengthening trend can continue without significant improvements in
the US budget and trade deficits.
In the weeks ahead, investor interest will continue to focus on US
economic activity. Clear signs of a moderate, noninflationary
expansion could further benefit the US stock and bond markets. In
addition, should the current Federal budget deficit reduction
efforts now underway in Washington prove successful, the
implications would likely be positive for the US financial markets.
<PAGE>
The Municipal Market
Tax-exempt bond yields continued to decline during the six-month
period ended October 31, 1995. As measured by the Bond Buyer Revenue
Bond Index, the yield on uninsured, long-term municipal revenue
bonds fell 30 basis points (0.30%) to end the October period at
approximately 6.00%. While tax-exempt bond yields have declined
dramatically from their highs one year ago, municipal bond yields
have exhibited considerable yield volatility on a weekly basis. In
recent months, tax-exempt bond yields have fluctuated by as much as
20 basis points on a week-to-week basis. US Treasury bond yields
have displayed similar volatility, but the extent of their decline
has been greater. By the end of October, long-term US Treasury bond
yields had declined almost 100 basis points to 6.33%. Proposed
Federal tax restructuring continued to weigh heavily on the tax-
exempt bond market. Thus far in 1995, US Treasury bond yields have
declined approximately 150 basis points. Municipal bond yields have
fallen approximately 95 basis points as the uncertainty surrounding
any changes to the existing Federal income tax structure has
prevented the municipal bond market from rallying as strongly as its
taxable counterpart.
A general view of a moderately expanding domestic economy, supported
by a very favorable inflationary environment, allowed interest rates
to significantly decline from their recent highs in November 1994.
However, this decline was not a smooth downward curve. Conflicting
economic indicators were released during recent months that have
prevented a clear consensus regarding the near-term direction of
interest rates from being reached. The resultant uncertainty has
promoted more of a saw-toothed pattern as interest rate declines
were repeatedly interrupted by indications of stronger-than-expected
economic growth. As these concerns were overcome by subsequent
weaker economic releases, interest rate declines have resumed. These
periods of volatility are likely to continue for the remainder of
1995, or until proposed Federal budget deficit reduction packages
are resolved and any resultant responses by the Federal Reserve
Board have occurred.
However, the municipal bond market's technical position remained
supportive throughout recent quarters. Approximately $82 billion in
long-term municipal securities were issued during the six months
ended October 31, 1995. While this issuance is virtually identical
to underwritings during the October 31, 1994 quarter, tax-exempt
bond issuance over the last 12 months remained approximately 25%
below comparable 1994 levels. The municipal bond market should
maintain this positive technical position well into 1996. Annual
issuance for 1995 is now projected to be approximately $140 billion,
significantly less than last year's already low level of $162
billion. Projected maturities and early redemptions for the
remainder of 1995 and throughout 1996 will lead to a continued
decline in the total outstanding municipal bond supply throughout
1996 and, perhaps, into 1998 should new bond issuance remain at
historically low levels.
<PAGE>
Despite the municipal bond market's relative underperformance
compared to the US Treasury market thus far in 1995, the extent of
the tax-exempt bond market's rally was nonetheless quite impressive.
Municipal bond yields have fallen 135 basis points from their highs
reached in November 1994 and municipal bond prices rose accordingly.
Most tax-exempt products recouped almost all of the losses incurred
in 1994 and are well on their way to posting double-digit total
returns for all of 1995. This relative underperformance so far in
1995 provided long-term investors with the rare opportunity to
purchase tax-exempt securities at yield levels near those of taxable
securities.
Additionally, many of the factors that led to the relative
underperformance of the tax-exempt bond market thus far in 1995,
namely investor concern regarding Federal budget deficit reductions
and proposed changes in the Federal income tax structure, are
nearing resolution. The Federal budget reconciliation process has
already begun, and may be essentially completed by year-end. Recent
public opinion polls suggest that the majority of American taxpayers
prefer the existing Federal income tax system compared to proposed
changes, such as the flat tax or national sales tax. In an upcoming
election year, neither party is likely to advocate a clearly
unpopular position, particularly one that can be expected to
negatively impact the Federal budget deficit reduction program
through reduced tax revenues. As these factors are resolved, we
believe that much of the resistance that the municipal bond market
met this year should dissipate. This should allow municipal bond
yields to significantly decline from current levels in order to
return to more normal historic yield relationships.
Portfolio Strategy
As a result of a sustained rally in the fixed-income markets in
1995, MuniYield Fund, Inc. was able to recoup substantially all of
the ground that had been lost in 1994. This came about despite what
can best be described as a skeptical and somewhat cautious view of
the market. Notwithstanding such a circumspect investment outlook,
we remained fully invested for much of the Fund's fiscal year as we
sought to provide shareholders with as high a level as possible of
tax-exempt income.
However, our caution was reflected more in the Fund's investments;
their defensive nature served the dual purpose of partially
insulating the portfolio from volatility while still generating a
competitive dividend. As a result, the Fund participated in much of
the rally experienced this past year and still remains well
positioned to withstand any potential correction in the markets that
may ensue in the coming months.
<PAGE>
In our last report to shareholders, we remarked that leverage
continued to benefit Common Stock shareholders. The benefits and
risks of leveraging have both been seen during in the past two
years. Price volatility is one component of leverage. Yield
enhancement is the other, and it is this aspect of total return that
has remained consistently favorable throughout this market cycle.
Moreover, the Federal Reserve Board's decision to lower short-term
interest rates in early July has further improved the outlook for
the Fund. The prospect for an easing of monetary policy in the near
term makes for a compelling argument in favor of leveraging and, to
the extent that these expectations are upheld, market discounts
should narrow over time. However, should the spread between short-
term and long-term interest rates narrow, the benefits of leverage
will diminish and the yield on the Fund's Common Stock will be
reduced. (For a complete explanation of the benefits and risks of
leveraging, see page 5 of this report to shareholders.)
In Conclusion
We appreciate your ongoing interest in MuniYield Fund, Inc., and we
look forward to assisting you with your financial needs in the
months and years ahead.
Sincerely,
(Arthur Zeikel)
Arthur Zeikel
President
(Vincent R. Giordano)
Vincent R. Giordano
Vice President
(Theodore R. Jaeckel Jr.)
Theodore R. Jaeckel Jr.
Portfolio Manager
<PAGE>
December 6, 1995
We are pleased to announce that Theodore R. Jaeckel Jr. is
responsible for the day-to-day management of MuniYield Fund, Inc.
Mr. Jaeckel has been employed by Merrill Lynch Asset Management,
L.P. (an affiliate of the Fund's investment adviser) since 1991 as
Vice President and Portfolio Manager. Prior thereto, he was employed
by Chemical Bank from 1983 to 1991, becoming Vice President in the
Tax-Exempt Bond Division in 1983.
<TABLE>
PROXY RESULTS
<CAPTION>
During the six-month period ended October 31, 1995, MuniYield Fund,
Inc. Common Stock shareholders voted on the following proposals. The
proposals were approved at a special shareholders' meeting on
September 8, 1995. The description of each proposal and number of
shares voted are as follows:
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors: Herbert I. London 35,610,041 780,373
Robert R. Martin 35,603,235 787,179
Andre F. Perold 35,613,766 776,648
Arthur Zeikel 35,601,172 789,242
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP as the Fund's independent
auditors for the current fiscal year. 35,491,192 253,899 645,323
<CAPTION>
During the six-month period ended October 31, 1995, MuniYield Fund,
Inc. Preferred Stock shareholders (Series A, B, C, D and E) voted on
the following proposals. The proposals were approved at a special
shareholders' meeting on September 8, 1995. The description of each
proposal and number of shares voted are as follows:
<PAGE>
Shares Voted Shares Voted
For Without Authority
<S> <S> <C> <C>
1. To elect the Fund's Board of Directors:
James H. Bodurtha, Herbert I. London,
Robert R. Martin, Joseph L. May,
Andre F. Perold and Arthur Zeikel
as follows: Series A 1,420 0
Series B 1,570 0
Series C 1,001 0
Series D 1,586 9
Series E 1,585 0
<CAPTION>
Shares Voted Shares Voted Shares Voted
For Against Abstain
<S> <S> <C> <C> <C>
2. To ratify the selection of Deloitte & Touche LLP
as the Fund's independent auditors
for the current fiscal year as follows: Series A 1,420 0 0
Series B 1,490 0 80
Series C 921 0 80
Series D 1,595 0 0
Series E 1,585 0 0
THE BENEFITS AND RISKS OF LEVERAGING
MuniYield Fund, Inc. utilizes leveraging to seek to enhance the
yield and net asset value of its Common Stock. However, these
objectives cannot be achieved in all interest rate environments. To
leverage, the Fund issues Preferred Stock, which pays dividends at
prevailing short-term interest rates, and invests the proceeds in
long-term municipal bonds. The interest earned on these investments
is paid to Common Stock shareholders in the form of dividends, and
the value of these portfolio holdings is reflected in the per share
net asset value of the Fund's Common Stock. However, in order to
benefit Common Stock shareholders, the yield curve must be
positively sloped; that is, short-term interest rates must be lower
than long-term interest rates. At the same time, a period of
generally declining interest rates will benefit Common Stock
shareholders. If either of these conditions change, then the risks
of leveraging will begin to outweigh the benefits.
<PAGE>
To illustrate these concepts, assume a fund's Common Stock
capitalization of $100 million and the issuance of Preferred Stock
for an additional $50 million, creating a total value of $150
million available for investment in long-term municipal bonds. If
prevailing short-term interest rates are approximately 3% and long-
term interest rates are approximately 6%, the yield curve has a
strongly positive slope. The fund pays dividends on the $50 million
of Preferred Stock based on the lower short-term interest rates. At
the same time, the fund's total portfolio of $150 million earns the
income based on long-term interest rates. Of course, increases in
short-term interest rates would reduce (and even eliminate) the
dividends of the Common Stock.
In this case, the dividends paid to Preferred Stock shareholders are
significantly lower than the income earned on the fund's long-term
investments, and therefore the Common Stock shareholders are the
beneficiaries of the incremental yield. However, if short-term
interest rates rise, narrowing the differential between short-term
and long-term interest rates, the incremental yield pick-up on the
Common Stock will be reduced or eliminated completely. At the same
time, the market value on the fund's Common Stock (that is, its
price as listed on the New York Stock Exchange) may, as a result,
decline. Furthermore, if long-term interest rates rise, the Common
Stock's net asset value will reflect the full decline in the price
of the portfolio's investments, since the value of the fund's
Preferred Stock does not fluctuate. In addition to the decline in
net asset value, the market value of the fund's Common Stock may
also decline.
PORTFOLIO ABBREVIATIONS
To simplify the listings of MuniYield Fund, Inc.'s portfolio
holdings in the Schedule of Investments, we have abbreviated the
names of many of the securities according to the list below and at
right.
AMT Alternative Minimum Tax (subject to)
COP Certificates of Participation
DATES Daily Adjustable Tax-Exempt Securities
GO General Obligation Bonds
HFA Housing Finance Agency
IDA Industrial Development Authority
IDB Industrial Development Board
IDR Industrial Development Revenue Bonds
M/F Multi-Family
PCR Pollution Control Revenue Bonds
S/F Single-Family
UT Unlimited Tax
VRDN Variable Rate Demand Notes
<PAGE>
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Alabama--1.1% BBB Baa1 $ 8,750 Courtland, Alabama, IDB, IDR, Refunding (Champion
International Corporation), Series A, 7.20% due 12/01/2013 $ 9,366
Alaska--4.6% A+ Aa 12,285 Alaska State, Housing Finance Corporation, GO, Series B,
7% due 12/01/2027 12,846
Valdez, Alaska, Marine Terminal Revenue Refunding Bonds:
NR* NR* 5,000 (Amerada Hess Pipeline Corporation), 6.10% due 2/01/2024 4,755
AA- A1 8,000 (British Petroleum Pipeline), Series B, 7% due 12/01/2025 8,619
AA- A1 10,635 (Sohio Pipeline), 7.125% due 12/01/2025 11,591
California A A1 7,730 Los Angeles, California, Wastewater System Revenue
- --3.4% Refunding Bonds, Series C, 7.10% due 6/01/2018 8,533
AAA Aaa 2,750 Los Angeles County, California, Metropolitan
Transportation Authority, Sales Tax Revenue Bonds
(Proposition C), Second Series A, 5% due 7/01/2025 (c) 2,472
AAA NR* 5,000 Orange County, California, Community Facilities District,
Special Tax No. 88-1 Revenue Bonds (Aliso Viejo Project),
Series A, 7.35% due 8/15/2002 (b) 5,893
NR* NR* 2,895 Pleasanton, California, Joint Powers Financing Authority,
Revenue Reassessment Bonds, Sub-Series B, 6.75% due
9/02/2017 2,924
AAA Aaa 7,750 University of California Revenue Bonds (Multiple Purpose
Projects), Series D, 6.375% due 9/01/2019 (e) 8,119
Colorado--5.6% NR* Baa 7,000 Arapahoe County, Colorado, Capital Improvement Trust
Fund, Highway Revenue Bonds, Series B, 7% due 8/31/2026 7,394
BBB+ Baa1 4,000 Colorado Health Facilities Authority Revenue Bonds
(P/SL Healthcare System Project), Series A, 6.875%
due 2/15/2023 4,504
Denver, Colorado, City and County Airport Revenue Bonds:
BBB Baa 8,000 AMT, Series D, 7.75% due 11/15/2013 9,393
BBB Baa 3,310 AMT, Series D, 7.75% due 11/15/2021 3,644
BBB Baa 19,250 Series A, 7.25% due 11/15/2025 20,742
NR* NR* 1,650 Mountain Village, Colorado, Metropolitan District,
Revenue Refunding Bonds (San Miguel County), UT, 7.95%
due 12/01/2003 1,830
Connecticut A1+ VMIG1++ 500 Connecticut State Development Authority, PCR, Refunding
- --0.5% (Connecticut Light & Power Co. Project), VRDN, Series A,
3.90% due 9/01/2028 (a) 500
NR* B1 2,645 New Haven, Connecticut, Facilities Revenue Bonds (Hill
Health Corporation Project), 9.25% due 5/01/2017 2,943
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
District of B- NR* $ 4,000 District of Columbia, COP, 7.30% due 1/01/2013 $ 4,099
Columbia--0.5%
Florida--2.1% BBB Baa1 3,210 Escambia County, Florida, PCR (Champion International
Corporation Project), AMT, 6.90% due 8/01/2022 3,346
AA Aa 5,000 Florida State, Revenue Refunding Bonds (Dade County
Road), UT, 5.30% due 7/01/2019 4,741
AA Aa1 10,000 Orlando, Florida, Utilities Commission, Water and Electric
Revenue Bonds, 5.125% due 10/01/2019 9,229
A1+ VMIG1++ 400 Saint Lucie County, Florida, PCR, Refunding (Florida
Power and Lighting Co. Project), VRDN, 4% due 1/01/2026 (a) 400
Georgia--1.4% NR* NR* 5,680 Atlanta, Georgia, Urban Residential Finance Authority,
College Facilities Revenue Bonds (Morris Brown College
Project), 9.50% due 6/01/2011 6,467
AAA Aaa 4,200 Georgia Municipal Electric Authority, Special Obligation
Bonds (Fifth Crossover Series--Project One), 6.40% due
1/01/2013 (c) 4,567
Hawaii--0.9% Hawaii State, Housing Finance and Development
Corporation, S/F Mortgage Purchase Revenue Bonds:
A Aa 1,945 AMT, Series A, 7% due 7/01/2011 2,062
A Aa 870 AMT, Series A, 7.10% due 7/01/2024 909
A Aa 3,040 Series B, 6.90% due 7/01/2016 3,185
A Aa 1,110 Series B, 7% due 7/01/2031 1,159
Idaho--1.3% Idaho Housing Agency, S/F Mortgage Revenue Bonds, AMT:
AAA NR* 6,000 Senior Series A, 6.70% due 7/01/2027 6,170
AA NR* 4,125 Senior Series C-2, 7.15% due 7/01/2023 4,335
Illinois--1.4% BBB Baa2 2,750 Illinois Development Finance Authority, PCR, Refunding
(Illinois Power Company Project), Series A, 7.375%
due 7/01/2021 2,983
BBB+ NR* 2,500 Illinois Educational Facilities Authority Revenue Bonds
(Chicago Osteopathic Health Systems), 7.25% due 5/15/2002 (b) 2,881
Illinois Health Facilities Authority Revenue Bonds:
A A 1,500 (Edward Hospital Association Project), 7% due 2/15/2022 1,576
BBB NR* 2,625 Refunding (Saint Elizabeth's Hospital of Chicago), 7.75%
due 7/01/2016 2,753
NR* VMIG1++ 700 (Resurrection Health Care System), VRDN, 4.05% due
5/01/2011 (a) 700
<PAGE>
Indiana--4.1% Indiana Health Facilities Finance Authority, Hospital
Revenue Bonds:
NR* Aa 10,000 (Daughters of Charity--Saint Vincent Hospital and
Healthcare Center), 5.75% due 11/15/2022 9,514
NR* A 1,150 Refunding (Saint Anthony Medical Center), Series A,
7% due 10/01/2017 1,220
Indianapolis, Indiana, Local Public Improvement Bond Bank
Revenue Bonds:
A+ NR* 11,775 Refunding, Series D, 6.75% due 2/01/2020 12,566
NR* A1 9,000 Series C, 6.70% due 1/01/2017 9,478
Iowa--0.0% A1+ NR* 100 Iowa Finance Authority, Solid Waste Disposal Revenue
Bonds (Cedar River Paper Company Project), VRDN, AMT,
Series A, 3.95% due 6/01/2024 (a) 100
Kansas--1.1% AAA Aaa 8,300 Burlington, Kansas, PCR, Refunding (Kansas Gas and
Electric Company Project), 7% due 6/01/2031 (e) 9,221
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Kentucky--1.1% BB Ba1 $ 5,300 Kenton County, Kentucky, Airport Board, Special Facilities
Revenue Bonds (Delta Airlines Project), AMT, Series A,
7.50% due 2/01/2020 $ 5,637
NR* NR* 3,000 Perry County, Kentucky, Solid Waste Disposal Revenue
Bonds (TJ International Project), AMT, 7% due 6/01/2024 3,072
Louisiana--5.7% A- A3 7,250 De Soto Parish, Louisiana, Environmental Improvement
Revenue Refunding Bonds (International Paper Co.
Project), AMT, Series B, 6.55% due 4/01/2019 7,433
NR* Baa2 35,000 Lake Charles, Louisiana, Harbor and Terminal District,
Port Facilities Revenue Refunding Bonds (Trunkline Company
Project), 7.75% due 8/15/2022 39,451
Maine--2.8% BBB- NR* 11,300 Maine Financial Authority, Solid Waste Disposal Revenue
Bonds (Boise Cascade Corporation Project), AMT,
7.90% due 6/01/2015 12,203
AA- Aa 10,460 Maine Housing Authority, S/F Mortgage Acquisition Bonds,
Series 1, 7.15% due 11/01/2021 11,086
Maryland--1.9% NR* NR* 10,000 Maryland State Energy Financing Administration Ltd.,
Obligation Revenue Bonds (Cogeneration--AES Warrior
Run), AMT, 7.40% due 9/01/2019 10,333
NR* Aaa 4,500 Prince Georges County, Maryland, Hospital Revenue
Bonds (Dimensions Health Corporation), 7.25% due
7/01/2002 (b) 5,258
<PAGE>
Massachusetts-- A+ Aaa 8,500 Massachusetts Bay Transportation Authority Revenue
2.6% Bonds (Massachusetts General Transportation Systems),
Series A, 7% due 3/01/2001 (b) 9,653
BBB+ A 6,030 Massachusetts Municipal Wholesale Electric Company,
Power Supply System Revenue Bonds, Series B, 6.75%
due 7/01/2017 6,458
AAA Aaa 5,000 Massachusetts State, HFA, Residential Development
Bonds, Series C, 6.90% due 11/15/2021 (f) 5,253
Michigan--1.2% Detroit, Michigan, GO, UT, Series A:
BBB Ba1 2,500 6.70% due 4/01/2010 2,633
BBB Ba1 1,500 6.80% due 4/01/2015 1,578
AA- A1 5,575 Michigan State Building Authority, Revenue Refunding
Bonds, Series I, 6.75% due 10/01/2011 6,060
Minnesota--2.6% A1+ NR* 600 Beltrami County, Minnesota, Environmental Control
Revenue Bonds (Northwood Panelboard Co. Project),
VRDN, 4.10% due 7/01/2025 (a) 600
A1+ NR* 300 Hubbard County, Minnesota, Solid Waste Disposal Revenue
Bonds (Potlatch Corporation Project), VRDN, AMT, 4.05%
due 8/01/2014 (a) 300
AA- A1 600 Minneapolis, Minnesota, Community Development Agency, PCR
(Northern States Power Co. Project), VRDN, 4% due 3/01/2011 (a) 600
AA A1 10,000 Minnesota State HFA, Housing Development Bonds, Series A,
6.95% due 2/01/2014 10,593
AA+ Aa 3,410 Minnesota State HFA, S/F Mortgage Bonds, AMT, Series A,
7.05% due 7/01/2022 3,553
BBB Baa1 5,700 Sartell, Minnesota, PCR, Refunding (Champion
International Corporation), 6.95% due 10/01/2012 6,020
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Mississippi A A2 $17,750 Lowndes County, Mississippi, Solid Waste Disposal and
- --3.9% PCR, Refunding (Weyerhaeuser Company Project), Series A,
6.80% due 4/01/2022 $ 19,848
AAA Aaa 11,100 Mississippi State, GO, 6.20% due 2/01/2008 (i) 11,939
Missouri--0.4% BBB- NR* 2,935 Joplin, Missouri, IDA, Hospital Facilities Revenue
Refunding and Improvement Bonds (Tri-State
Osteopathic), 8.25% due 12/15/2014 3,024
<PAGE>
New Jersey-- NR* Ba 4,050 Atlantic County, New Jersey, Utilities Authority, Solid
3.5% Waste Revenue Bonds, 7.125% due 3/01/2016 4,119
Camden County, New Jersey, Pollution Control Financing
Authority, Solid Waste Resource Recovery Revenue
Bonds, AMT:
BBB+ Ba 2,500 Series A, 7.50% due 12/01/2010 2,585
BBB+ Ba 7,000 Series B, 7.50% due 12/01/2009 7,243
AAA NR* 9,500 New Jersey State Housing and M/F Mortgage Finance Agency,
Housing Revenue Refunding Bonds (Presidential Plaza),
7% due 5/01/2030 (d) 9,980
AA+ Aa1 4,500 New Jersey State Revenue Refunding Bonds, UT, Series D,
5.75% due 2/15/2006 4,828
New Mexico--1.4% Farmington, New Mexico, PCR, Refunding, Series A:
BB Ba2 5,000 (Public Service Company--San Juan Project), 6.40% due
8/15/2023 4,799
A+ Aa3 5,850 (Southern California Edison Company), 7.20% due 4/01/2021 6,412
New York--14.6% New York City, New York, GO, UT:
BBB+ Baa1 2,000 Series A, 7.75% due 8/15/2008 2,232
BBB+ Baa1 4,600 Series A, 7.75% due 8/15/2012 5,113
BBB+ Baa1 5,000 Series A, 7.75% due 8/15/2016 5,558
BBB+ Baa1 15,000 Series B, 7.75% due 2/01/2010 16,671
BBB+ Baa1 1,555 Series B, 7.75% due 2/01/2013 1,727
BBB+ Baa1 4,500 Series B, 7% due 6/01/2016 4,728
BBB+ Baa1 6,400 Series B, Sub-Series B-1, 7% due 8/15/2016 6,806
BBB+ Baa1 5,000 Series C, Sub-Series C-1, 7.50% due 8/01/2021 5,478
AAA VMIG1++ 2,500 New York City, New York, Municipal Water Finance
Authority, Water and Sewer System Revenue Bonds,
VRDN, Series G, 3.90% due 6/15/2024 (a) (h) 2,500
BBB+ Baa1 5,000 New York State Dormitory Authority Revenue Bonds
(Court Facilities Lease Bonds), Series A, 5.25% due 5/15/2021 4,471
A+ A1 5,000 New York State Energy Research and Development
Authority, Electric Facilities Revenue Bonds (Con Edison Co.
of New York, Inc. Project), AMT, Series A, 7.50% due 1/01/2026 5,423
A Aa 24,200 New York State Environmental Facilities Corporation, PCR
(State Water--Revolving Fund), Series E, 6.875% due 6/15/2010 26,503
New York State Local Government Assistance Corporation
Revenue Bonds:
A A 5,000 Series A, 6.50% due 4/01/2020 5,264
AAA Aaa 5,000 Series D, 7% due 4/01/2002 (b) 5,771
AAA Aaa 8,000 New York State Thruway Authority, Service Contract Revenue
Bonds (Local Highway and Bridge), 5.75% due 4/01/2013 (e) 8,100
A+ Aa 15,515 Triborough Bridge and Tunnel Authority, New York, Revenue
Refunding Bonds (General Purpose), Series A, 5%
due 1/01/2015 14,274
</TABLE>
<PAGE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
North Carolina A A2 $ 3,385 Martin County, North Carolina, Industrial Facilities and
- --3.1% Pollution Control Financing Authority Revenue Bonds (Solid
Waste--Weyerhaeuser Company), AMT, 5.65% due 12/01/2023 $ 3,203
North Carolina HFA, S/F Revenue Bonds:
A+ Aa 5,385 AMT, Series T, 7.05% due 9/01/2020 5,650
A+ Aa 15,520 Refunding, Series S, 6.95% due 3/01/2017 16,443
NR* VMIG1++ 200 Person County, North Carolina, Industrial Facilities and
Pollution Control Financing Authority, Solid Waste Disposal
Revenue Bonds (Carolina Power and Light Company), AMT,
DATES, 4% due 11/01/2016 (a) 200
North A+ Aa 3,990 North Dakota State, HFA, S/F Mortgage Revenue Bonds,
Dakota--0.5% Series A, 7% due 7/01/2023 4,194
Ohio--1.3% NR* Ba2 3,600 Hilliard, Ohio, IDR, Refunding (Kroger Co.), 8.10% due 7/01/2012 3,940
NR* Ba2 3,600 Lucas County, Ohio, IDR, Refunding (Kroger Co.), 8.50%
due 7/01/2011 3,977
BBB Baa1 2,000 Montgomery County, Ohio, Health Systems Revenue Bonds
(Franciscan Sisters of the Poor), Series B-1, 8.10% due 7/01/2018 2,237
Pennsylvania BB Ba2 2,500 Beaver County, Pennsylvania, IDA, PCR, Refunding (Cleveland
- --4.5% Electric Project), 7.625% due 5/01/2025 2,588
Pennsylvania Convention Center Authority, Revenue Refunding
Bonds, Series A:
BBB- Baa 9,675 6.70% due 9/01/2014 10,176
BBB- Baa 5,000 6.75% due 9/01/2019 5,242
NR* NR* 10,500 Pennsylvania Economic Development Financing Authority,
Recycling Revenue Bonds (Ponderosa Fibres Project), AMT,
Series A, 9.25% due 1/01/2022 10,754
NR* NR* 8,500 Philadelphia, Pennsylvania, IDR, Refunding (Commercial
Development--Host Marriott), AMT, 7.75% due 12/01/2017 8,649
South A1+ VMIG1++ 650 Berkeley County, South Carolina, Pollution Control, Revenue
Carolina--2.1% Refunding (Amoco Chemical Co. Project), VRDN, 3.90% due
7/01/2012 (a) 650
AAA Aaa 5,000 Piedmont, South Carolina, Municipal Power Agency, Electric
Revenue Refunding Bonds, Series A, 6.375% due 1/01/2006 (h) 5,568
A- A1 2,500 Richland County, South Carolina, PCR, Refunding (Union Camp
Corporation Project), Series C, 6.55% due 11/01/2020 2,607
AAA Aaa 7,125 South Carolina State, Public Service Authority, Revenue
Refunding Bonds (Santee Cooper), Series B, 7.10% due
7/01/2001 (b) 8,172
<PAGE>
South BBB Baa 2,500 South Dakota State, Health and Educational Facilities
Dakota--0.3% Authority, Revenue Refunding Bonds (Prairie Lakes Health
Care), 7.25% due 4/01/2022 2,561
Tennessee--1.5% NR* NR* 1,765 Knox County, Tennessee, Health, Educational, and Housing
Facilities Board, Hospital Facilities Revenue Bonds (Baptist
Health Systems of East Tennessee), 8.50% due 4/15/2004 1,928
BBB+ A3 10,285 Maury County, Tennessee, IDB, PCR, Refunding (Saturn Corp.
Project), 6.50% due 9/01/2024 10,664
Texas--8.9% A1+ VMIG1++ 700 Brazos River Authority, Texas, PCR, Refunding (Texas Utilities
Electric Co.), VRDN, AMT, Series C, 4.05% due 6/01/2030 (a) 700
A- A 3,800 Ector County, Texas, Hospital District Revenue Bonds (Medical
Center Hospital), 7.30% due 4/15/2012 4,110
BBB Baa1 8,400 Gulf Coast, Texas, Waste Disposal Authority Revenue Bonds
(Champion International Corporation), AMT, 7.45% due 5/01/2026 8,979
AA Aa 10,000 Harris County, Texas, Toll Road Sub-Lien, Revenue Refunding
Bonds, UT, 6.75% due 8/01/2014 10,775
</TABLE>
<TABLE>
SCHEDULE OF INVESTMENTS (continued) (in Thousands)
<CAPTION>
S&P Moody's Face Value
State Ratings Ratings Amount Issue (Note 1a)
<S> <S> <S> <C> <S> <C>
Texas A A2 $ 7,000 Matagorda County, Texas, Navigational District No. 1, PCR
(concluded) (Central Power and Light Company Project), 7.50%
due 12/15/2014 $ 7,765
BB Ba 5,000 Odessa, Texas, Junior College District, Revenue Refunding
Bonds, Series A, 8.125% due 12/01/2018 5,300
Port Corpus Christi Authority, Texas, Nueces County, PCR
(Hoechst Celanese Corporation Project):
A+ A2 10,000 AMT, 6.875% due 4/01/2017 10,504
A+ A2 9,600 Refunding, 7.50% due 8/01/2012 10,555
A+ A2 5,000 Red River Authority, Texas, PCR (Hoechst Celanese Corporation
Project), AMT, 6.875% due 4/01/2017 5,252
AAA Aaa 5,110 Texas National Research Laboratory Commission Financing
Corporation, Lease Revenue Bonds (Superconducting Super
Collider Project), 7.10% due 12/01/2001 (b) 5,903
Travis County, Texas, Housing Finance Corporation, Residential
Mortgage Revenue Refunding Bonds, Series A (f) (g):
AAA NR* 985 7% due 12/01/2011 1,062
AAA NR* 2,805 7.05% due 12/01/2025 2,965
<PAGE>
Utah--0.3% AA NR* 2,140 Utah State, HFA, S/F Mortgage Revenue Bonds, AMT, Series E-2,
7.15% due 7/01/2024 2,238
Vermont--0.4% AA NR 3,585 Vermont Educational and Health Buildings Financing Agency
Revenue Bonds (Middlebury College Project), 6% due 11/01/2022 3,625
Virginia--1.0% AA+ Aa1 8,125 Virginia State, HDA, Commonwealth Mortgage Revenue Bonds,
Series A, 7.10% due 1/01/2025 8,560
Washington--2.5% Washington State Public Power Supply System, Revenue
Refunding Bonds:
AA Aa 9,235 (Nuclear Project No. 1), Series A, 7% due 7/01/2011 9,882
AA Aa 5,000 (Nuclear Project No. 1), Series A, 6.875% due 7/01/2017 5,284
AA Aa 5,000 (Nuclear Project No. 2), Series B, 7% due 7/01/2012 5,350
West BBB+ A3 7,500 Mason County, West Virginia, PCR, Refunding (Appalachian
Virginia--1.9% Power Company Project), Series I, 6.85% due 6/01/2022 7,902
BBB+ Baa1 5,500 Randolph County, West Virginia, Building Commission,
Hospital Revenue Refunding and Improvement Bonds (Davis
Memorial Hospital Project), Series A, 7.65% due 11/01/2021 5,802
NR* NR* 1,500 Upshur County, West Virginia, Solid Waste Disposal Revenue
Bonds (TJ International Project), AMT, 7% due 7/15/2025 1,538
Wisconsin--0.3% NR* A 2,710 Wisconsin State Health and Educational Facilities Authority
Revenue Bonds (Mercy Hospital of Janesville Incorporated),
6.60% due 8/15/2022 2,805
Puerto A- Baa1 2,500 Puerto Rico, Electric Power Authority, Power Revenue Bonds,
Rico--0.3% Series T, 6.375% due 7/01/2024 2,621
Total Investments (Cost--$759,191)--98.6% 811,779
Other Assets Less Liabilities--1.4% 11,621
--------
Net Assets--100.0% $823,400
========
<FN>
(a)The interest rate is subject to change periodically based upon
prevailing market rates. The interest rate shown is the rate in
effect at October 31, 1995.
(b)Prerefunded.
(c)AMBAC Insured.
(d)FHA Insured.
(e)MBIA Insured.
(f)FNMA Collateralized.
(g)GNMA Collateralized.
(h)FGIC Insured.
(i)Escrowed to Maturity.
*Not Rated
++Highest short-term rating by Moody's Investors Service, Inc.
Ratings of issues shown have not been audited by Deloitte & Touche LLP.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION
<TABLE>
Statement of Assets, Liabilities and Capital as of October 31, 1995
<S> <S> <C> <C>
Assets: Investments, at value (identified cost--$759,190,746) (Note 1a) $811,778,549
Cash 2,163,295
Receivables:
Interest $ 15,584,356
Securities sold 243,514 15,827,870
------------
Deferred organization expenses (Note 1e) 11,698
Prepaid expenses and other assets 22,458
------------
Total assets 829,803,870
------------
Liabilities: Payables:
Securities purchased 4,746,163
Dividends to shareholders (Note 1f) 1,181,125
Investment adviser (Note 2) 359,951 6,287,239
------------
Accrued expenses and other liabilities 116,529
------------
Total liabilities 6,403,768
------------
Net Assets: Net assets $823,400,102
============
Capital: Capital Stock (200,000,000 shares authorized) (Note 4):
Preferred Stock, par value $.10 per share (10,000 shares of
AMPS* issued and outstanding at $25,000 per share liquidation
preference) $250,000,000
Common Stock, par value $.10 per share (37,061,414 shares issued
and outstanding) $ 3,706,141
Paid-in capital in excess of par 519,009,869
Undistributed investment income--net 7,709,254
Accumulated realized capital losses on investments--net (Note 5) (9,612,965)
Unrealized appreciation on investments--net 52,587,803
------------
Total--Equivalent to $15.47 net asset value per Common Stock
(market price--$14.375) 573,400,102
------------
Total capital $823,400,102
============
<FN>
*Auction Market Preferred Stock.
<PAGE>
See Notes to Financial Statements.
</TABLE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statement of Operations
<CAPTION>
For the Year Ended
October 31, 1995
<S> <S> <C> <C>
Investment Income Interest and amortization of premium and discount earned $ 52,237,797
(Note 1d):
Expenses: Investment advisory fees (Note 2) $ 3,981,816
Commission fees (Note 4) 686,889
Transfer agent fees 120,525
Accounting services (Note 2) 102,573
Professional fees 83,557
Printing and shareholder reports 58,653
Custodian fees 56,217
Directors' fees and expenses 46,667
Listing fees 33,437
Pricing fees 18,398
Amortization of organization expenses (Note 1e) 10,782
Other 28,425
------------
Total expenses 5,227,939
------------
Investment income--net 47,009,858
------------
Realized & Realized loss on investments--net (9,612,893)
Unrealized Gain Change in unrealized appreciation/depreciation on investments--net 59,252,744
(Loss) on ------------
Investments Net Increase in Net Assets Resulting from Operations $ 96,649,709
- --Net (Notes 1b, ============
1d & 3):
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (continued)
<TABLE>
Statements of Changes in Net Assets
<CAPTION>
For the Year Ended
October 31,
Increase (Decrease) in Net Assets: 1995 1994
<S> <S> <C> <C>
Operations: Investment income--net $ 47,009,858 $ 47,624,907
Realized gain (loss) on investments--net (9,612,893) 9,469,638
Change in unrealized appreciation/depreciation on investments--net 59,252,744 (92,046,200)
------------ ------------
Net increase (decrease) in net assets resulting from operations 96,649,709 (34,951,655)
------------ ------------
Dividends & Investment income--net:
Distributions to Common Stock (37,084,429) (39,600,729)
Shareholders Preferred Stock (8,354,970) (6,723,911)
(Note 1f): Realized gain on investments--net:
Common Stock (8,130,978) (8,671,336)
Preferred Stock (1,336,651) (1,008,475)
------------ ------------
Net decrease in net assets resulting from dividends and
distributions to shareholders (54,907,028) (56,004,451)
------------ ------------
Capital Stock Value of shares issued to Common Stock shareholders in
Transactions reinvestment of dividends and distributions -- 2,807,654
(Notes 1e & 4): Offering costs resulting from the issuance of Preferred Stock -- 30,500
------------ ------------
Net increase in net assets derived from capital stock
transactions -- 2,838,154
------------ ------------
Net Assets: Total increase (decrease) in net assets 41,742,681 (88,117,952)
Beginning of year 781,657,421 869,775,373
------------ ------------
End of year* $823,400,102 $781,657,421
============ ============
<FN>
*Undistributed investment income--net (Note 1g) $ 7,709,254 $ 6,136,765
============ ============
See Notes to Financial Statements.
</TABLE>
<PAGE>
FINANCIAL INFORMATION (concluded)
<TABLE>
Financial Highlights
<CAPTION>
For the
Period
The following per share data and ratios have been derived Nov. 29,
from information provided in the financial statements. 1991++ to
For the Year Ended October 31, Oct. 31,
Increase (Decrease) in Net Asset Value: 1995 1994 1993 1992
<S> <S> <C> <C> <C> <C>
Per Share Net asset value, beginning of period $ 14.35 $ 16.80 $ 14.69 $ 14.18
Operating -------- -------- -------- --------
Performance: Investment income--net 1.27 1.29 1.31 1.18
Realized and unrealized gain (loss) on
investments--net 1.34 (2.23) 2.27 .57
-------- -------- -------- --------
Total from investment operations 2.61 (.94) 3.58 1.75
-------- -------- -------- --------
Less dividends and distributions to Common
Stock shareholders:
Investment income--net (1.00) (1.07) (1.11) (.89)
Realized gain on investments--net (.22) (.23) (.16) --
-------- -------- -------- --------
Total dividends and distributions to Common
Stock shareholders (1.22) (1.30) (1.27) (.89)
-------- -------- -------- --------
Capital charge resulting from issuance of
Common Stock -- -- -- (.02)
-------- -------- -------- --------
Effect of Preferred Stock activity:++++
Dividends and distributions to Preferred
Stock shareholders:
Investment income--net (.23) (.18) (.17) (.19)
Realized gain on investments--net (.04) (.03) (.03) --
Capital charge resulting from issuance of
Preferred Stock -- -- -- (.14)
-------- -------- -------- --------
Total effect of Preferred Stock activity (.27) (.21) (.20) (.33)
-------- -------- -------- --------
Net asset value, end of period $ 15.47 $ 14.35 $ 16.80 $ 14.69
======== ======== ======== ========
Market price per share, end of period $ 14.375 $ 12.125 $ 16.75 $ 15.125
======== ======== ======== ========
<PAGE>
Total Based on market price per share 29.76% (20.94%) 19.91% 7.06%+++
Investment ======== ======== ======== ========
Return:** Based on net asset value per share 18.00% (6.71%) 23.83% 9.99%+++
======== ======== ======== ========
Ratios to Expenses, net of reimbursement .66% .66% .64% .58%*
Average ======== ======== ======== ========
Net Assets:*** Expenses .66% .66% .64% .65%*
======== ======== ======== ========
Investment income--net 5.91% 5.76% 5.72% 6.08%*
======== ======== ======== ========
Supplemental Net assets, net of Preferred Stock, end of period
Data: (in thousands) $573,400 $531,657 $619,775 $526,287
======== ======== ======== ========
Preferred Stock outstanding, end of period
(in thousands) $250,000 $250,000 $250,000 $250,000
======== ======== ======== ========
Portfolio turnover 52.99% 44.27% 25.58% 66.45%
======== ======== ======== ========
Dividends Per Series A--Investment income--net $ 887 $ 598 $ 560 $ 680
Share on Series B--Investment income--net 850 733 554 690
Preferred Stock Series C--Investment income--net 827 647 566 685
Outstanding:++++++ Series D--Investment income--net 897 659 556 688
Series E--Investment income--net 759 707 542 688
<FN>
*Annualized.
**Total investment returns based on market value, which can be
significantly greater or lesser than the net asset value, may result
in substantially different returns. Total investment returns exclude
the effects of sales loads.
***Do not reflect the effect of dividends to Preferred Stock
shareholders.
++Commencement of Operations.
++++The Fund's Preferred Stock was issued on December 23, 1991.
++++++Dividends per share have been adjusted to reflect a two-for-
one stock split.
+++Aggregate total investment return.
See Notes to Financial Statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. Significant Accounting Policies:
MuniYield Fund, Inc. (the "Fund") is registered under the Investment
Company Act of 1940 as a non-diversified, closed-end management
investment company. The Fund determines and makes available for
publication the net asset value of its Common Stock on a weekly
basis. The Fund's Common Stock is listed on the New York Stock
Exchange under the symbol MYD. The following is a summary of
significant accounting policies followed by the Fund.
(a) Valuation of investments--Municipal bonds are traded primarily
in the over-the-counter markets and are valued at the most recent
bid price or yield equivalent as obtained by the Fund's pricing
service from dealers that make markets in such securities. Financial
futures contracts and options thereon, which are traded on
exchanges, are valued at their closing price as of the close of such
exchanges. Options, which are traded on exchanges, are valued at
their last sale price as of the close of such exchanges or, lacking
any sales, at the last available bid price. Securities with
remaining maturities of sixty days or less are valued at amortized
cost, which approximates market value. Securities for which market
quotations are not readily available are valued at their fair value
as determined in good faith by or under the direction of the Board
of Directors of the Fund, including valuations furnished by a
pricing service retained by the Fund, which may utilize a matrix
system for valuations. The procedures of the pricing service and its
valuations are reviewed by the officers of the Fund under the
general supervision of the Board of Directors.
(b) Derivative financial instruments--The Fund may engage in various
portfolio strategies to seek to increase its return by hedging its
portfolio against adverse movements in the debt markets. Losses may
arise due to changes in the value of the contract or if the
counterparty does not perform under the contract.
* Financial futures contracts--The Fund may purchase or sell
interest rate futures contracts and options on such futures
contracts for the purpose of hedging the market risk on existing
securities or the intended purchase of securities. Futures contracts
are contracts for delayed delivery of securities at a specific
future date and at a specific price or yield. Upon entering into a
contract, the Fund deposits and maintains as collateral such initial
margin as required by the exchange on which the transaction is
effected. Pursuant to the contract, the Fund agrees to receive from
or pay to the broker an amount of cash equal to the daily
fluctuation in value of the contract. Such receipts or payments are
known as variation margin and are recorded by the Fund as unrealized
gains or losses. When the contract is closed, the Fund records a
realized gain or loss equal to the difference between the value of
the contract at the time it was opened and the value at the time it
was closed.
<PAGE>
* Options--The Fund is authorized to write covered call options and
purchase put options. When the Fund writes an option, an amount
equal to the premium received by the Fund is reflected as an asset
and an equivalent liability. The amount of the liability is
subsequently marked to market to reflect the current market value of
the option written.
When a security is purchased or sold through an exercise of an
option, the related premium paid (or received) is added to (or
deducted from) the basis of the security acquired or deducted from
(or added to) the proceeds of the security sold. When an option
expires (or the Fund enters into a closing transaction), the Fund
realizes a gain or loss on the option to the extent of the premiums
received or paid (or gain or loss to the extent the cost of the
closing transaction exceeds the premium paid or received).
Written and purchased options are non-income producing investments.
(c) Income taxes--It is the Fund's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated
investment companies and to distribute substantially all of its
taxable income to its shareholders. Therefore, no Federal income tax
provision is required.
(d) Security transactions and investment income--Security
transactions are recorded on the dates the transactions are entered
into (the trade dates). Interest income is recognized on the
accrual basis. Discounts and market premiums are amortized into
interest in-come. Realized gains and losses on security transac-
tions are determined on the identified cost basis.
(e) Deferred organization expenses and offering expenses--Deferred
organization expenses are amortized on a straight-line basis over a
five-year period. Direct expenses relating to the public offering of
the Common and Preferred Stock were charged to capital at the time
of issuance.
(f) Dividends and distributions--Dividends from net investment
income are declared and paid monthly. Distributions of capital gains
are recorded on the ex-dividend dates.
(g) Reclassification--Generally accepted accounting principles
require that certain differences between accumulated net realized
capital losses for financial reporting and tax purposes, if
permanent, be reclassified to undistributed net investment income.
Accordingly, current year's permanent book/tax differences of $2,030
have been reclassified from accumulated net realized capital losses
to undistributed net investment income. These reclassifications have
no effect on net assets or net asset value per share.
<PAGE>
2. Investment Advisory Agreement and
Transactions with Affiliates:
The Fund has entered into an Investment Advisory Agreement with Fund
Asset Management, L.P. ("FAM"). The general partner of FAM is
Princeton Services, Inc. ("PSI"), an indirect wholly-owned
subsidiary of Merrill Lynch & Co., Inc. ("ML & Co."), which is the
limited partner.
FAM is responsible for the management of the Fund's portfolio and
provides the necessary personnel, facilities, equipment and certain
other services necessary to the operations of the Fund. For such
services, the Fund pays a monthly fee at an annual rate of 0.50% of
the Fund's average weekly net assets.
Accounting services are provided to the Fund by FAM at cost.
Certain officers and/or directors of the Fund are officers and/or
directors of FAM, PSI, Merrill Lynch, Pierce, Fenner & Smith Inc.
("MLPF&S"), and/or ML & Co.
3. Investments:
Purchases and sales of investments, excluding short-term securities,
for the year ended October 31, 1995 were $399,221,368 and
$409,032,383, respectively.
Net realized and unrealized gains (losses) as of October 31, 1995
were as follows:
Realized Unrealized
Gains (Losses) Gains
Long-term investments $ 1,575,962 $52,587,803
Short-term investments 18,313 --
Financial futures contracts (11,207,168) --
------------ -----------
Total $ (9,612,893) $52,587,803
============ ===========
As of October 31, 1995, net unrealized appreciation for Federal
income tax purposes aggregated $52,587,803, of which $52,639,044
related to appreciated securities and $51,241 related to depreciated
securities. The aggregate cost of investments at October 31, 1995
for Federal income tax purposes was $759,190,746.
<PAGE>
4. Capital Stock Transactions:
The Fund is authorized to issue 200,000,000 shares of capital stock,
including Preferred Stock, par value $.10 per share, all of which
were initially classified as Common Stock. The Board of Directors is
authorized, however, to reclassify any unissued shares of capital
stock without approval of the holders of Common Stock.
Common Stock
For the year ended October 31, 1995, shares issued and outstanding
remained constant at 37,061,414. At October 31, 1995, total paid-in
capital amounted to $522,716,010.
Preferred Stock
Auction Market Preferred Stock ("AMPS") are shares of Preferred
Stock of the Fund that entitle their holders to receive cash
dividends at an annual rate that may vary for the successive
dividend periods. The yields in effect at October 31, 1995 were as
follows: Series A, 3.799%; Series B, 3.779%; Series C, 3.786%,
Series D, 3.69%; and Series E, 3.79%.
A two-for-one stock split occurred on December 1, 1994. As a result,
as of October 31, 1995, there were 10,000 AMPS shares authorized,
issued and outstanding with a liquidation preference of $25,000 per
share, plus accumulated and unpaid dividends of $1,130,421.
The Fund pays commissions to certain broker-dealers at the end of
each auction at an annual rate ranging from 0.25% to 0.375%,
calculated on the proceeds of each auction. For the year ended
October 31, 1995, MLPF&S, an affiliate of FAM, earned $184,279 as
commissions.
5. Capital Loss Carryforward:
At October 31, 1995, the Fund had a net capital loss carryforward of
approximately $751,000, all of which expires in 2003. This amount
will be available to offset like amounts on any future taxable
gains.
6. Subsequent Event:
On November 13, 1995, the Fund's Board of Directors declared an
ordinary income dividend to Common Stock shareholders in the amount
of $0.085969 per share, payable on November 29, 1995 to shareholders
of record as of November 24, 1995.
<PAGE>
<AUDIT-REPORT>
INDEPENDENT AUDITOR'S REPORT
The Board of Directors and Shareholders of
MuniYield Fund, Inc.:
We have audited the accompanying statement of assets, liabilities
and capital, including the schedule of investments, of MuniYield
Fund, Inc. as of October 31, 1995, the related statements of
operations for the year then ended and changes in net assets for
each of the years in the two-year period then ended and the
financial highlights for each of the years in the three-year period
then ended and the period November 29, 1991 (commencement of
operations) to October 31, 1992. These financial statements and the
financial highlights are the responsibility of the Fund's
management. Our responsibility is to express an opinion on these
financial statements and the 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 the 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 securities owned at October
31, 1995 by correspondence with the custodian, broker and an
affiliated fund. 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
MuniYield Fund, Inc. as of October 31, 1995, the results of its
operations, the changes in its net assets, and the financial
highlights for the respective stated periods in conformity with
generally accepted accounting principles.
Deloitte & Touche LLP
Princeton, New Jersey
December 6, 1995
</AUDIT-REPORT>
IMPORTANT TAX INFORMATION (UNAUDITED)
<PAGE>
All of the net investment income distributions paid monthly by
MuniYield Fund, Inc. during its taxable year ended October 31, 1995
qualify as tax-exempt interest dividends for Federal income tax
purposes. Additionally, the following table summarizes the per share
capital gains distributions paid by the Fund during the year.
<TABLE>
<CAPTION>
Payable Short-Term Long-Term
Date Capital Gains Capital Gains
<S> <S> <C> <C> <C>
Common Stock Shareholders 12/29/94 -- $ 0.219392
Preferred Stock Shareholders: Series A 12/07/94 -- $100.32
1/04/95 -- $ 18.42
Series B 12/14/94 -- $109.17
1/11/95 -- $ 36.58
Series C 12/01/94 -- $191.57
12/07/94 -- $ 19.15
1/04/95 -- $ 13.73
Series D 11/30/94 -- $198.86
12/28/94 -- $ 31.49
Series E 12/01/94 -- $205.13
12/29/94 -- $ 37.90
Please retain this information for your records.
</TABLE>
PER SHARE INFORMATION (UNAUDITED)
<TABLE>
Per Share Selected Quarterly Financial Data*
<CAPTION>
Dividends/Distributions
Net Realized Unrealized
Investment Gains Gains Net Investment Income Capital Gains
For the Quarter Income (Losses) (Losses) Common Preferred Common Preferred
<S> <C> <C> <C> <C> <C> <C> <C>
November 1, 1993 to January 31, 1994 $.33 $.20 $(.07) $.27 $.05 $.23 $.03
February 1, 1994 to April 30, 1994 .31 .10 (1.79) .27 .03 -- --
May 1, 1994 to July 31, 1994 .32 -- .20 .26 .05 -- --
August 1, 1994 to October 31, 1994 .33 (.04) (.83) .27 .05 -- --
November 1, 1994 to January 31, 1995 .33 (.27) .38 .26 .04 .22 .04
February 1, 1995 to April 30, 1995 .30 (.29) .61 .25 .06 -- --
May 1, 1995 to July 31, 1995 .32 (.09) .32 .24 .07 -- --
August 1, 1995 to October 31, 1995 .32 .39 .29 .25 .06 -- --
<PAGE>
<CAPTION>
Net Asset Value Market Price**
For the Quarter High Low High Low Volume***
<S> <C> <C> <C> <C> <C>
November 1, 1993 to January 31, 1994 $16.82 $16.35 $16.75 $15.125 3,287
February 1, 1994 to April 30, 1994 16.65 14.63 16.50 13.50 3,670
May 1, 1994 to July 31, 1994 15.52 14.68 14.50 13.375 3,341
August 1, 1994 to October 31, 1994 15.23 14.35 14.25 11.625 5,570
November 1, 1994 to January 31, 1995 14.31 13.39 13.50 11.25 7,793
February 1, 1995 to April 30, 1995 14.99 14.33 13.75 13.25 2,612
May 1, 1995 to July 31, 1995 15.46 14.75 14.75 13.875 4,144
August 1, 1995 to October 31, 1995 15.56 14.90 14.375 13.375 3,140
<FN>
*Calculations are based upon shares of Common Stock outstanding at
the end of each quarter.
**As reported in the consolidated transaction reporting system.
***In thousands.
</TABLE>
OFFICERS AND DIRECTORS
Arthur Zeikel, President and Director
James H. Bodurtha, Director
Herbert I. London, Director
Robert R. Martin, Director
Joseph L. May, Director
Andre F. Perold, Director
Terry K. Glenn, Executive Vice President
Donald C. Burke, Vice President
Vincent R. Giordano, Vice President
Kenneth A. Jacob, Vice President
Gerald M. Richard, Treasurer
Mark B. Goldfus, Secretary
Custodian
The Bank of New York
90 Washington Street
New York, New York 10286
Transfer Agents
Common Stock:
The Bank of New York
101 Barclay Street
New York, New York 10286
<PAGE>
Preferred Stock:
IBJ Schroder Bank & Trust Company
One State Street
New York, New York 10004
NYSE Symbol
MYD
