VALUE LINE US MULTINATIONAL CO FUND INC, 485BPOS, 1998-07-24

VALUE LINE US MULTINATIONAL CO FUND INC
485BPOS, 1998-07-24

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 24, 1998

FILE NO. 33-60829
FILE NO. 811-7311
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SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

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FORM N-1A

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/

Pre-Effective Amendment No. / /

Post-Effective Amendment No. 3 /X/

and

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. / /
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VALUE LINE U.S. MULTINATIONAL COMPANY FUND, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)

220 East 42nd Street
New York, New York
(ADDRESS OF PRINCIPAL EXECUTIVE 10017-5891
OFFICES) (ZIP CODE)

Registrant's Telephone Number, including Area Code: (212) 907-1500

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David T. Henigson
Value Line, Inc.
220 East 42nd Street
New York, New York 10017-5891
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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Copy to:
Peter D. Lowenstein
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830

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It is proposed that this filing will become effective (check appropriate
box)

/ / Immediately upon filing pursuant to paragraph (b)
/ / 60 days after filing pursuant to paragraph (a)(1)
/ / 75 days after filing pursuant to paragraph (a)(2)
/X/ On August 1, 1998 pursuant to paragraph (b)
/ / On (date) pursuant to paragraph (a)(1)
/ / 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.

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Title of Securities Being Registered: Common Stock, $.01 par value

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VALUE LINE U.S. MULTINATIONAL COMPANY FUND, INC.
FORM N-1A
CROSS REFERENCE SHEET
(AS REQUIRED BY RULE 495)

<TABLE>
<CAPTION>
N-1A ITEM NO. LOCATION
- ---------------- -----------------------------------------------
<S> <C> <C>
PART A (PROSPECTUS)
Item 1. Cover Page..................................... Cover Page
Item 2. Synopsis....................................... Summary of Fund Expenses
Item 3. Condensed Financial Information................ Summary of Fund Expenses; Financial Highlights
Item 4. General Description of Registrant.............. Cover Page; Investment Objective and Policies;
Investment Restrictions; Additional
Information
Item 5. Management of the Fund......................... Summary of Fund Expenses; Management of the
Fund; Additional Information
Item 6. Capital Stock and Other Securities............. Dividends, Distributions and Taxes; Additional
Information
Item 7. Purchase of Securities Being Offered........... How to Buy Shares; Calculation of Net Asset
Value; Investor Services
Item 8. Redemption or Repurchase....................... How to Redeem Shares
Item 9. Pending Legal Proceedings...................... Not Applicable

PART B (STATEMENT OF ADDITIONAL INFORMATION)
Item 10. Cover Page..................................... Cover Page
Item 11. Table of Contents.............................. Table of Contents
Item 12. General Information and History................ Additional Information (Part A)
Item 13. Investment Objective and Policies.............. Investment Objective and Policies; Investment
Restrictions
Item 14. Management of the Fund......................... Directors and Officers
Item 15. Control Persons and Principal Holders of
Securities................................... Management of the Fund (Part A); Directors and
Officers
Item 16. Investment Advisory and Other Services......... Management of the Fund (Part A); The Adviser
Item 17. Brokerage Allocation........................... Management of the Fund (Part A); Brokerage
Arrangements
Item 18. Capital Stock and Other Securities............. Additional Information (Part A)
Item 19. Purchase, Redemption and Pricing of Securities
Being Offered................................ How to Buy Shares; How to Redeem Shares;
Calculation of Net Asset Value (Part A)
Item 20. Tax Status..................................... Taxes
Item 21. Underwriters................................... Not Applicable
Item 22. Calculation of Performance Data................ Performance Information (Part A); Performance
Data
Item 23. Financial Statements........................... Financial Statements
</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 Registration Statement.
<PAGE>

VALUE LINE
U.S. MULTINATIONAL COMPANY PROSPECTUS
FUND, INC. August 1, 1998

220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818 or 1-800-243-2729
www.valueline.com

Value Line U.S. Multinational Company Fund, Inc.
(the "Fund") is a no-load investment company whose
investment objective is maximum total return. The
Fund invests primarily in common stocks or
securities convertible into common stock of U.S.
companies that have significant sales from
international operations. From time to time, a
portion of the Fund's assets may be invested in
short-term indebtedness or may be held in cash.

The Fund's investment adviser is Value Line, Inc.
(the "Adviser").

Shares of the Fund are offered at net asset value.
There are no sales charges or redemption fees.

FUND SHARES ARE NOT DEPOSITS OR OBLIGATIONS OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK, NOR ARE THEY FEDERALLY INSURED OR OTHERWISE
PROTECTED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL
RESERVE BOARD, OR ANY OTHER AGENCY.

This Prospectus sets forth concise information about the Fund that a
prospective investor ought to know before investing. This Prospectus
should be retained for future reference. Additional information about
the Fund is contained in a Statement of Additional Information, dated
August 1, 1998, which may be obtained at no charge by writing or
telephoning the Fund at the address or telephone numbers listed above.
The Statement, which is incorporated into this Prospectus by
reference, has been filed with the Securities and Exchange Commission
and is available along with other related materials on the
Commission's Internet Web site at http://www.sec.gov.

DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891

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>
SUMMARY OF FUND EXPENSES

<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES
Sales Load on Purchases......................... None
Sales Load on Reinvested Dividends.............. None
Deferred Sales Load............................. None
Redemption Fees................................. None
Exchange Fee.................................... None
ANNUAL FUND OPERATING EXPENSES(1)
(AS A PERCENTAGE OF AVERAGE NET ASSETS)
Management Fees................................. 0.75%
12b-1 Fees(2)................................... 0.25%
Other Expenses.................................. 0.69%
Total Fund Operating Expenses................... 1.69%
</TABLE>

<TABLE>
<CAPTION>
10
EXAMPLE 1 YEAR 3 YEARS 5 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
and no voluntary waiver of fees and expenses:... $ 17 $ 53 $ 92 $200
</TABLE>

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(1) The foregoing is based upon the expenses for the year ended March 31, 1998,
and is designed to assist investors in understanding the various costs and
expenses that an investor in the Fund will bear directly or indirectly. This
example should not be considered a representation of past or future
expenses. ACTUAL EXPENSES IN THE FUTURE MAY BE GREATER OR LESS THAN THOSE
SHOWN.

(2) Because 12b-1 fees continue for the life of the investment, over time a long
term investor may pay more than the economic equivalent of the maximum
front-end sales charges permitted by the National Association of Securities
Dealers, Inc.

2
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FINANCIAL HIGHLIGHTS
(SELECTED DATA FOR A SHARE OF CAPITAL STOCK OUTSTANDING THOUGHOUT EACH PERIOD)

The following information on selected per share data and ratios for the two
years in the period ended March 31, 1998 and for the period ended March 31,
1996, and the related financial statements, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose unqualified report
thereon appears in the Fund's Annual Report to Shareholders which is
incorporated by reference in the Statement of Additional Information. This
information should be read in conjunction with the financial statements and
notes thereto which also appear in the Fund's Annual Report to Shareholders
available from the Fund without charge.

<TABLE>
<CAPTION>
NOVEMBER 17,
1995
YEARS ENDED MARCH 31, (COMMENCEMENT OF
---------------------------- OPERATIONS) TO
1998 1997 MARCH 31, 1996
----------- ------------ ----------------
<S> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD.............. $ 12.34 $ 10.55 $ 10.00
----------- ------------ --------
INCOME FROM INVESTMENT OPERATIONS:
Net investment income......................... (.08) .12(1) .07(1)
Net gains or losses on securities
(both realized and unrealized)............... 4.80 1.82 .52
----------- ------------ --------
Total from investment operations.............. 4.72 1.94 .59
----------- ------------ --------
LESS DISTRIBUTIONS:
Dividends from net investment income.......... -- (.14) (.04)
Distributions from realized capital gains..... (.79) (.01) --
----------- ------------ --------
Total Distributions........................... (.79) (.15) (.04)
----------- ------------ --------
NET ASSET VALUE, END OF PERIOD.................... $ 16.27 $ 12.34 $ 10.55
----------- ------------ --------
----------- ------------ --------
TOTAL RETURN...................................... 39.17% 18.36% 5.93%+
----------- ------------ --------
----------- ------------ --------
RATIOS/SUPPLEMENTAL DATA:
Net assets end of period (in thousands)........... $29,675 $18,081 $ 12,448
Ratio of operating expenses to average net
assets........................................... 1.69%(4) 1.97%(3) 2.45%*(2)(3)
Ratio of net investment income to average net
assets........................................... (0.60)% (0.64)%(3) (0.32)%*(2)(3)
Portfolio turnover rate........................... 49% 56% 17%+
</TABLE>

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(1) Net of custody fee credits, expense reimbursement and fees waived by the
Adviser. Had these expenses been fully paid by the Fund, for the periods
ended March 31, 1997 and 1996, investment loss-net per share would have
been $(.07) and $(.001), respectively.

(2) Due to the reimbursement of expenses and waiver of fees by the Adviser,
data are not indicative of future periods.

(3) Before custody fee credits, expense reimbursement and fees waived by the
Adviser. After expense reimbursement and fees waived for the periods ended
March 31, 1997 and 1996, ratio of expenses to average net assets was 0.40%
and 0%*, respectively, and ratio of net investment income to average net
assets was 0.93% and 2.13%*, respectively.

(4) Before offset of custody credits.

+ Not annualized.

* Annualized.

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INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is maximum total return, consisting of
capital appreciation and dividend and interest income. The Fund will at all
times keep not less than 65% of the market value of its total assets invested in
equity securities (including common stocks and securities convertible into
common stocks such as debt securities and preferred stocks) of U.S. companies
that derive at least 25% of their sales from outside of the United States. This
is a fundamental policy of the Fund which along with its investment objective
cannot be changed without shareholder approval. There can be no assurance that
the Fund will achieve its investment objective. There are risks in all
investments, including any stock investment, and in all mutual funds that invest
in stocks.

BASIC INVESTMENT STRATEGY

The Fund seeks to achieve its investment objective by investing primarily in
"U.S. Multinational equity securities" which includes common stocks and
securities convertible into common stocks such as bonds, debentures, corporate
notes and preferred stocks. As used in this Prospectus, "U.S. Multinational
equity securities" refer to the securities of companies that derive at least 25%
of their sales from outside the United States. A goal of the Fund is to maintain
an equity portfolio of securities of companies with an aggregate share of at
least 50% of sales from outside the United States, although the securities of
any individual company may represent non-United States sales of that company of
as little as 25%. When the Adviser deems it appropriate in the light of economic
or market conditions, up to 35% of the Fund's total assets may be held from time
to time in cash, U.S. Government securities, or money-market instruments which
are rated in the top two categories by a nationally recognized rating
organization. The Fund may also write covered call options and enter into
repurchase agreements.

In selecting securities for purchase or sale, the Adviser may rely on the
Value Line Timeliness-TM- Ranking System or the Value Line Performance-TM-
Ranking System, if a ranking is available for that particular stock. The Value
Line Timeliness Ranking System has evolved after many years of research and has
been used in substantially its present form since 1965. It is based upon
historical prices and reported earnings, recent earnings and price momentum and
the degree to which the last reported earnings deviated from estimated earnings,
among other factors. The Timeliness Rankings are published weekly in the
Standard Edition of The Value Line Investment Survey for approximately 1,700
stocks. On a scale of 1 (highest) to 5 (lowest), the rankings compare the
Adviser's estimate of the probable market performance of each stock during the
coming twelve months relative to all 1,700 stocks under review. The rankings are
updated weekly to reflect the most recent information.

The Value Line Performance Ranking System for common stocks was introduced
in 1995. It is a variation of the Value Line Small-Capitalization Ranking
System, which has been employed in managing pension client assets since 1981,
and in managing the Value Line Small-Cap Growth Fund, Inc. since 1993. The
Performance Ranking System evaluates the approximately 1,800 stocks in the
Expanded Edition of The Value Line Investment Survey. This stock selection
system relies on factors similar to those found in the Value Line Timeliness
Ranking System except that it does not rely on earnings estimates. The
Performance Ranks use a scale of 1 (highest) to 5 (lowest) to compare the
Adviser's estimate of the probable market performance of each Expanded Edition
stock during the coming twelve months relative to all 1,800 stocks under review
in the Expanded Edition.

Neither the Value Line Timeliness Ranking System nor the Value Line
Performance Ranking System eliminates market risk, but the Adviser believes that
they provide objective standards for determining

4
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whether the market is undervaluing or overvaluing a particular security. The
utilization of these Rankings is no assurance that the Fund will perform more
favorably than the market in general over any particular period.

MISCELLANEOUS INVESTMENT PRACTICES

COVERED CALL OPTIONS. The Fund may write covered call options on stocks
held in its portfolio ("covered options"). When the Fund writes a covered call
option, it gives the purchaser of the option the right to buy the underlying
security at the price specified in the option (the "exercise price") at any time
during the option period. If the option expires unexercised, the Fund will
realize income to the extent of the amount received for the option (the
"premium"). If the option is exercised, a decision over which the Fund has no
control, the Fund must sell the underlying security to the option holder at the
exercise price. By writing a covered option, the Fund foregoes, in exchange for
the premium less the commission ("net premium"), the opportunity to profit
during the option period from an increase in the market value of the underlying
security above the exercise price. The Fund will not write call options in an
aggregate amount greater than 25% of its net assets.

The Fund will purchase call options only to close out a position. When an
option is written on securities in the Fund's portfolio and it appears that the
purchaser of that option is likely to exercise the option and purchase the
underlying security, it may be considered appropriate to avoid liquidating the
Fund's position, or the Fund may wish to extinguish a call option sold by it so
as to be free to sell the underlying security. In such instances the Fund may
purchase a call option on the same security with the same exercise price and
expiration date which had been previously written. Such a purchase would have
the effect of closing out the option which the Fund has written. The Fund
realizes a gain if the amount paid to purchase the call option is less than the
premium received for writing a similar option and a loss if the amount paid to
purchase a call option is greater than the premium received for writing a
similar option. Generally, the Fund realizes a short-term capital loss if the
amount paid to purchase the call option with respect to a stock is greater than
the premium received for writing the option. If the underlying security has
substantially risen in value, it may be expensive to purchase the call option
for the closing transaction.

SHORT SALES. The Fund may from time to time make short sales of securities
in order to protect a profit or to attempt to minimize a loss with respect to
convertible securities. The Fund will only make a short sale of a security if it
owns other securities convertible into an equivalent amount of such securities.
No more than 10% of the value of the Fund's net assets taken at market may at
any one time be held as collateral for such sales.

LENDING PORTFOLIO SECURITIES. The Fund may lend its portfolio securities to
broker-dealers or institutional investors if as a result thereof the aggregate
value of all securities loaned does not exceed 33 1/3% of the total assets of
the Fund. The loans will be made in conformity with applicable regulatory
policies and will be 100% collateralized by cash, cash equivalents or U.S.
Treasury bills on a daily basis in an amount equal to the market value of the
securities loaned and interest earned. The Fund will retain the right to call,
upon notice, the loaned securities and intends to call loaned voting securities
in anticipation of any important or material matter to be voted on by
shareholders. While there may be delays in recovery or even loss of rights in
the collateral should the borrower fail financially, the loans will be made only
to firms deemed by the Adviser to be of good standing and will not be made
unless, in the judgment of the Adviser, the consideration which can be earned
from such loan justifies the risk. The Fund may pay reasonable custodian and
administrative fees in connection with the loans.

5
<PAGE>
REPURCHASE AGREEMENTS. The Fund may invest temporary cash balances in
repurchase agreements. A repurchase agreement involves a sale of securities to
the Fund, with the concurrent agreement of the seller (a member bank of the
Federal Reserve System or a securities dealer which the Adviser believes to be
financially sound) to repurchase the securities at the same price plus an amount
equal to an agreed-upon interest rate, within a specified time, usually less
than one week, but, on occasion, at a later time. The Fund will make payment for
such securities only upon physical delivery or evidence of book-entry transfer
to the account of the custodian or a bank acting as agent for the Fund.
Repurchase agreements may also be viewed as loans made by the Fund which are
collateralized by the securities subject to repurchase. The value of the
underlying securities will be at least equal at all times to the total amount of
the repurchase obligation, including the interest factor. In the event of a
bankruptcy or other default of a seller of a repurchase agreement, the Fund
could experience both delays in liquidating the underlying securities and
losses, including: (a) possible decline in the value of the underlying security
during the period while the Fund seeks to enforce its rights thereto; (b)
possible subnormal levels of income and lack of access to income during this
period; and (c) expenses of enforcing its rights. The Board of Directors
monitors the creditworthiness of parties with which the Fund enters into
repurchase agreements.

RESTRICTED SECURITIES. On occasion, the Fund may purchase securities which
would have to be registered under the Securities Act of 1933 if they were to be
publicly distributed. However, it will not do so if the value of such securities
and other securities which are not readily marketable (including repurchase
agreements maturing in more than seven days) would exceed 15% of the market
value of its net assets. It is management's policy to permit the occasional
acquisition of such restricted securities only if (except in the case of
short-term, non-convertible debt securities) there is an agreement by the issuer
to register such securities, ordinarily at the issuer's expense, when requested
to do so by the Fund. The acquisition in limited amounts of restricted
securities is believed to be helpful toward the attainment of the Fund's
investment objective without unduly restricting its liquidity or freedom in the
management of its portfolio. However, because restricted securities may only be
sold privately or in an offering registered under the Securities Act of 1933, or
pursuant to an exemption from such registration, substantial time may be
required to sell such securities, and there is a greater than usual risk of
price decline prior to sale.

In addition, the Fund may purchase certain restricted securities ("Rule 144A
securities") for which there is a secondary market of qualified institutional
buyers, as contemplated by Rule 144A under the Securities Act of 1933. Rule 144A
provides an exemption from the registration requirements of the Securities Act
for the resale of certain restricted securities to qualified institutional
buyers.

The Adviser, under the supervision of the Board of Directors, will consider
whether securities purchased under Rule 144A are liquid or illiquid for purposes
of the Fund's limitation on investment in securities which are not readily
marketable or are illiquid. Among the factors to be considered are the frequency
of trades and quotes, the number of dealers and potential purchasers, dealer
undertakings to make a market and the nature of the security and the time needed
to dispose of it.

To the extent that the liquid Rule 144A securities that the Fund holds
become illiquid, due to lack of sufficient qualified institutional buyers or
market or other conditions, the percentage of the Fund's assets invested in
illiquid assets would increase. The Adviser, under the supervision of the Board
of Directors, will monitor the Fund's investments in Rule 144A securities and
will consider appropriate measures to enable the Fund to maintain sufficient
liquidity for operating purposes and to meet redemption requests.

6
<PAGE>
RISK FACTORS

Investors should be aware of the following:

- There are risks in all investments, including any stock investment, and in
all mutual funds. The Fund's net asset value will fluctuate to reflect the
investment performance of the securities held by the Fund.

- The value a shareholder receives upon redemption may be greater or less
than the value of such shares when acquired.

- The use of investment techniques such as investing in repurchase
agreements and lending portfolio securities involves greater risk than
does an investment in a fund that does not engage in these activities.

- Investments in securities of U.S. multinational companies that have
substantial international operations may be affected by economic and
political conditions in foreign countries and fluctuations in currency
exchange rates.

- In some foreign countries, there is the possibility of government controls
or restrictions, expropriation of assets or confiscating taxation.

INVESTMENT RESTRICTIONS

The Fund has adopted a number of investment restrictions which may not be
changed without shareholder approval. These are set forth in the Statement of
Additional Information and provide, among other things, that the Fund may not:

(a) borrow in excess of 10% of the value of its total assets and then only
as a temporary measure;

(b) purchase securities (other than U.S. government securities) if the
purchase would cause the Fund, at the time, to have more than 5% of the value of
its total assets invested in the securities of any one company or to own more
than 10% of the outstanding voting securities of any one company; or

MANAGEMENT OF THE FUND

The management and affairs of the Fund are supervised by the Fund's Board of
Directors. The Fund's officers conduct and supervise the daily business
operations of the Fund. The Fund's investment decisions are made by an
investment committee of employees of the Adviser.

THE ADVISER. The Adviser was organized in 1982 and is the successor to
substantially all of the operations of Arnold Bernhard & Co., Inc. ("AB&Co.").
The Adviser was formed as part of a reorganization of AB&Co., a sole
proprietorship formed in 1931 which became a New York corporation in 1946.
AB&Co. currently owns approximately 81% of the outstanding shares of the
Adviser's common stock. Jean Bernhard Buttner, Chairman, President and Chief
Executive Officer of the Adviser, owns all of the voting stock of AB&Co.
Substantially all of the non-voting stock is owned by or for the benefit of
members of the Bernhard family. The Adviser currently acts as investment adviser
to the other Value Line mutual funds and furnishes investment advisory services
to private and institutional accounts with combined assets in excess of $5
billion. Value Line Securities, Inc., the Fund's distributor, is a subsidiary of
the Adviser. Another subsidiary of the Adviser publishes The Value Line
Investment Survey and other publications. The Adviser manages the Fund's
investments, provides various administrative services and supervises the Fund's
daily business affairs, subject to the authority of the Board of Directors. The

7
<PAGE>

Adviser is paid an advisory fee at an annual rate of 0.75% of the Fund's average
daily net assets during the year. From time to time, the Adviser may voluntarily
assume certain expenses of the Fund and waive its advisory fee. This will have
the effect of lowering the overall expense ratio of the Fund. For more
information about the Fund's management fees and expenses, see the "Summary of
Fund Expenses" on page 2.

BROKERAGE. The Fund pays a portion of its total brokerage commissions to
Value Line Securities, Inc., a subsidiary of the Adviser, which clears
transactions for the Fund through unaffiliated broker-dealers.

CALCULATION OF NET ASSET VALUE

The net asset value of the Fund's shares for purposes of both purchases and
redemptions is determined once daily as of the scheduled close of regular
trading of the New York Stock Exchange (generally 4:00 p.m., New York time) on
each day that 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. The
New York Stock Exchange is currently closed on New Year's Day, Martin Luther
King, Jr. Day, Presidents' Day, Good Friday, Memorial Day, Independence Day,
Labor Day, Thanksgiving Day and Christmas Day. The net asset value per share is
determined by dividing the total value of the investments and other assets of
the Fund, less any liabilities, by the total outstanding shares. Securities
listed on a securities exchange and over-the-counter securities traded on the
NASDAQ national market are valued at the closing sales price on the date as of
which the net asset value is being determined. In the absence of closing sales
prices for such securities and for securities traded in the over-the-counter
market, the security is valued at the midpoint between the latest available and
representative asked and bid prices. Securities for which market quotations are
not readily available or which are not readily marketable and all other assets
of the Fund are valued at fair value as the Board of Directors or persons acting
at their direction may determine in good faith. Short-term investments that
mature in less than 60 days are valued at amortized cost if their original
maturity was 60 days or less, or by amortizing their value on the 61st day prior
to maturity, if their original term exceeds 60 days (unless the Directors
determine that amortized cost value does not represent fair value, in which case
fair value will be determined as described above).

HOW TO BUY SHARES

PURCHASE BY CHECK. To buy shares, send a check made payable to "NFDS-Agent"
and a completed and signed application form to Value Line Funds, c/o NFDS, P.O.
Box 419729, Kansas City, MO 64141-6729. Third party checks will not be accepted
for either initial or subsequent investments. For assistance in completing the
application and for information on pre-authorized telephone purchases, call
Value Line Securities at 1-800-223-0818 during New York business hours. Upon
receipt of the completed and signed purchase application and a check, National
Financial Data Services, Inc. ("NFDS"), the Fund's shareholder servicing agent,
will buy full and fractional shares (to three decimal places) at the net asset
value next computed after the funds are received and will confirm the investment
to the investor. Subsequent investments may be made by attaching a check to the
confirmation's "next payment" stub, by telephone or by federal funds wire.
Investors may also buy shares through broker-dealers other than Value Line
Securities. Such broker-dealers may charge investors a reasonable service fee.
Neither Value Line Securities nor the Fund receives any part of such fees when
charged (and which can be avoided by investing directly). If an order to
purchase shares is cancelled due to nonpayment or because the purchaser's check
does not clear, the purchaser will be responsible for any loss incurred by the
Fund or Value Line Securities by reason of such cancellation. If the purchaser
is a

8
<PAGE>

shareholder, Value Line Securities reserves the right to redeem sufficient
shares from the shareholder's account to protect the Fund against loss. Minimum
orders are $1,000 for an initial purchase and $100 for each subsequent purchase.
The Fund reserves the right to waive the initial and subsequent investment
minimums at any time and may refuse any order for the purchase of shares.

WIRE PURCHASE -- $1,000 MINIMUM. An investor should call 1-800-243-2729 to
obtain an account number. After receiving an account number, instruct your
commercial bank to wire transfer "federal funds" via the Federal Reserve System
as follows:

State Street Bank and Trust Company, Boston, MA
ABA # 011000028
Attn: Mutual Fund Division
DDA # 99049868
Value Line U.S. Multinational Company Fund
A/C # ________________________
Shareholder's name and account information
Tax ID # ________________________

NOTE: A COMPLETED AND SIGNED APPLICATION MUST BE MAILED IMMEDIATELY AND
RECEIVED BY NFDS BEFORE IT CAN HONOR ANY WITHDRAWAL OR EXCHANGE TRANSACTIONS.

After your account has been opened, you may wire additional investments in
the same manner.

For an initial investment made by federal funds wire purchase, the wire must
include a valid social security number or tax identification number. Investors
purchasing shares in this manner will then have 30 days after purchase to
provide the certification and signed account application. All payments should be
made in U.S. dollars and, to avoid fees and delays, should be drawn on only U.S.
banks. Until receipt of the above, any distributions from the account will be
subject to withholding at the rate of 31%.

SUBSEQUENT TELEPHONE PURCHASES -- $250 MINIMUM. Upon completion of the
telephone purchase authorization section of the account application,
shareholders who own Fund shares with a current value of $500 or more may also
purchase additional shares in amounts of $250 or more up to twice the value of
their shares by calling 1-800-243-2729 between 9:00 a.m. and 4:00 p.m. New York
time. Such orders will be priced at the closing net asset value on the day
received and payment will be due within three business days. If payment is not
received within the required time or a purchaser's check does not clear, the
order is subject to cancellation and the purchaser will be responsible for any
loss incurred by the Fund or Value Line Securities. The Fund will employ
reasonable procedures to confirm that instructions communicated by telephone are
genuine. These procedures include requiring some form of personal identification
prior to acting upon instructions received by telephone. The Fund will not be
liable for following instructions communicated by telephone that it reasonably
believes to be genuine. Shares may not be purchased by telephone for a qualified
retirement plan.

DIVIDENDS, DISTRIBUTIONS AND TAXES

The Fund intends to distribute net investment income quarterly and any net
realized capital gains at least annually. Income dividends and capital gains
distributions are automatically reinvested in additional shares of the Fund
unless the shareholder has requested otherwise.

The following discussion is intended for general information only. A
prospective investor should consult with his or her own tax advisor as to the
tax consequences of an investment in the Fund.

9
<PAGE>

The Fund intends to qualify annually and elect to be treated as a regulated
investment company under the Internal Revenue Code of 1986, as amended (the
"Code"). To qualify, the Fund must meet certain income, distribution and
diversification requirements. In any year in which the Fund qualifies as a
regulated investment company and timely distributes all of its taxable income,
the Fund generally will not pay any U.S. federal income or excise tax.

Dividends paid out of the Fund's investment company taxable income
(including dividends, interest and net short-term capital gains) will be taxable
to U.S. shareholders as ordinary income. Because a portion of the Fund's income
will consist of dividends paid by U.S. corporations, a portion of the dividends
paid by the Fund will be eligible for the corporate dividends-received
deduction. Distributions of net capital gains (the excess of net long-term
capital gains over net short-term capital losses), if any, designated as capital
gain dividends may be taxable to individuals and certain other shareholders at
the maximum federal 20% or 28% capital gains rates (depending upon the Fund's
holding period for the assets giving rise to the capital gains), regardless of
how long the shareholder has held the Fund's shares. Dividends are taxable to
shareholders in the same manner whether received in cash or reinvested in
additional Fund shares.

A distribution will be treated as paid on December 31 of a calendar year if
it is declared by the Fund in October, November or December with a record date
within such period and paid by the Fund during January of the following calendar
year. Such distributions will be taxable to shareholders in the calendar year in
which the distributions are declared, rather than the calendar year in which the
distributions are received. Each year the Fund will notify shareholders of the
tax status of dividends and distributions paid or declared with respect to the
Fund.

Upon the sale or other disposition of shares of the Fund, including an
exchange of shares in the Fund for shares of another Value Line fund, a
shareholder may realize a capital gain or loss for federal income tax purposes.
Capital gains may be taxable to individuals and certain other shareholders at
the maximum federal 20% or 28% capital gains rate (depending upon the
shareholder's holding period for the shares).

The Fund may be required to withhold U.S. federal income tax at the rate of
31% of all taxable distributions payable to certain shareholders who fail to
provide the Fund with their correct taxpayer identification number or to make
required certifications, or who have been notified by the Internal Revenue
Service that they are subject to backup withholding. Backup withholding is not
an additional tax. Any amounts withheld may be credited against the
shareholder's U.S. federal income tax liability. The Fund reserves the right to
close, by redemption, accounts for which the holder fails to provide a valid
social security or taxpayer identification number when required to do so.

Further information relating to U.S. income tax matters is contained in the
Statement of Additional Information. Prospective investors should consult their
own tax advisors with regard to the federal tax consequences of the purchase,
ownership, or disposition of Fund shares, as well as the tax consequences
arising under the laws of any state, foreign country or other taxing
jurisdiction.

PERFORMANCE INFORMATION

The Fund may from time to time include information regarding its total
return performance in advertisements or in information furnished to existing or
prospective shareholders. When information regarding total return is furnished,
it will be based upon changes in the Fund's net asset value, and will

10
<PAGE>
assume the reinvestment of all capital gains distributions and income dividends.
It will take into account nonrecurring charges, if any, which the Fund may incur
but will not take into account income taxes due on Fund distributions.

The table below illustrates the total return performance of the Fund for the
period indicated by showing the value of a hypothetical $1,000 investment made
at the beginning of the period. The information contained in the table has been
computed by applying the Fund's average annual total return to the hypothetical
$1,000 investment. The table assumes reinvestment of all capital gains
distributions and income dividends, but does not take into account income taxes
due on Fund distributions or dividends. Investors should note that the
investment results of the Fund will fluctuate over time, and any presentation of
the Fund's total return for any period should not be considered as a
representation of what an investment may earn or what an investor's total return
may be in any future period.

<TABLE>
<CAPTION>
AVERAGE
ANNUAL
TOTAL RETURN
------------
<S> <C> <C>
For the year ended March 31, 1998........................................... $1,392 +39.17 %
For the period from November 17, 1995 (commencement of operations) through
March 31, 1998............................................................. $1,745 +26.51 %
</TABLE>

Comparative performance information may be used from time to time in
advertising the Fund's shares, including data from Lipper Analytical Services,
Inc. and other industry or financial publications. The Fund may compare its
performance to that of other mutual funds with similar investment objectives and
to stock or other relevant indices. From time to time, articles about the Fund
regarding its performance or ranking may appear in national publications such as
Kiplinger's Personal Finance, Money Magazine, Financial World, Morningstar,
Personal Investors, Forbes, Fortune, Business Week, Wall Street Journal,
Investor's Business Daily, Donoghue, The Financial Times, The Economist, Worth,
Smart Money, Mutual Fund Forecaster, U.S. News and World Report and Barron's.
Some of these publications may publish their own rankings or performance reviews
of mutual funds, including the Fund. Reference to or reprints of such articles
may be used in the Fund's promotional literature.

HOW TO REDEEM SHARES

Shares of the Fund may be redeemed at any time at their current net asset
value next determined after NFDS receives a request in proper form. ALL REQUESTS
FOR REDEMPTION SHOULD BE SENT TO NFDS, P.O. BOX 419729, KANSAS CITY, MO
64141-6729. The value of shares of the Fund on redemption may be more or less
than the shareholder's cost, depending upon the market value of the Fund's
assets at the time. A shareholder holding certificates for shares must surrender
the certificates properly endorsed with signature guaranteed. A signature
guarantee may be executed by any "eligible" guarantor. Eligible guarantors
include domestic banks, savings associations, credit unions, member firms of a
national securities exchange, and participants in the New York Stock Exchange
Medallion Signature Program, the Securities Transfer Agents Medallion Program
("STAMP") and the Stock Exchanges Medallion Program. A guarantee from a Notary
Public is not an acceptable source. The signature on any request for redemption
of shares not represented by certificates, or on any stock power in lieu
thereof, must be similarly guaranteed. In each case the signature or signatures
must correspond to the names in which the account is registered. Additional
documentation may be required when shares are registered in the name of a
corporation, agent or fiduciary. For further information, you should contact
NFDS.

The Fund does not impose a redemption charge, but shares redeemed through
brokers or dealers may be subject to a service charge by such firms. A check for
the redemption proceeds will be mailed within seven days following receipt of
all required documents. However, payment may be postponed

11
<PAGE>

under unusual circumstances such as when normal trading is not taking place on
the New York Stock Exchange. In addition, shares purchased by check may not be
redeemed until the check has cleared which may take up to 15 calendar days from
the purchase date.

If the Board of Directors determines that it is in the best interests of the
Fund, the Fund may redeem, upon prior written notice, at net asset value all
shareholder accounts which, due to redemptions, fall below $500 in net asset
value. In such event, an investor will have 60 days to increase the shares in
his account to the minimum level.

SERVICE AND DISTRIBUTION PLAN

The Fund has a Service and Distribution Plan (the "Plan"), adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940, for the payment at an
annual rate of 0.25% of the Fund's average daily net assets of certain expenses
incurred by Value Line Securities, Inc. (the "Distributor") in advertising,
marketing and distributing the Fund's shares and for servicing the Fund's
shareholders. Under the Plan, the Distributor may make payments to securities
dealers, banks, financial institutions and other organizations which render
distribution and administrative services with respect to the distribution of the
Fund's shares. Such services may include, among other things, answering investor
inquiries regarding the Fund; processing new shareholder account applications
and redemption transactions; responding to shareholder inquiries; and such other
services as the Fund may request to the extent permitted by applicable statute,
rule or regulation. The Plan also provides that the Adviser may make such
payments out of its advisory fee, its past profits or any other source available
to it. The fees payable to the Distributor under the Plan are payable without
regard to actual expenses incurred.

INVESTOR SERVICES

VALU-MATIC.-REGISTERED TRADEMARK- The Fund offers a free service to its
shareholders, Valu-Matic-Registered Trademark-, through which monthly
investments of $25 or more may be made automatically into the shareholder's Fund
account. The shareholder authorizes the Fund to debit the shareholder's bank
account monthly for the purchase of Fund shares on or about the 3rd or 18th of
each month. Further information regarding this service can be obtained from
Value Line Securities by calling 1-800-223-0818.

EXCHANGE OF SHARES. Shares of the Fund may be exchanged for shares of the
other Value Line funds in any identically registered account on the basis of the
respective net asset values next computed after receipt of the exchange order.
No telephone exchanges can be made for less than $1,000. If shares of the Fund
are being exchanged for shares of The Value Line Cash Fund, Inc. or The Value
Line Tax Exempt Fund--Money Market Portfolio and the shares (including shares in
accounts under the control of one investment advisor) have a value in excess of
$500,000, then, at the discretion of the Adviser, the shares to be purchased
will be purchased at the closing price on the third business day following the
redemption of the shares being exchanged to allow the Fund to utilize normal
securities settlement procedures in transferring the proceeds of the redemption.

The exchange privilege may be exercised only if the shares to be acquired
may be sold in the investor's State. Prospectuses for the other funds may be
obtained from Value Line Securities by calling 1-800-223-0818. Each such
exchange involves a redemption and a purchase for tax purposes. Broker-dealers
are not prohibited from charging a commission for handling the exchange of Fund
shares. To avoid paying such a commission, send the request with signature
guaranteed to NFDS. The Fund reserves the right to terminate the exchange
privilege of any account making more than eight exchanges a year. (An exchange
out of The Value Line Cash Fund, Inc. or The Value Line Tax Exempt Fund--Money
Market Portfolio is not counted for this purpose.) The exchange privilege may be
modified or terminated

12
<PAGE>
upon sixty days' notice to shareholders, and any of the Value Line funds may
discontinue offering its shares generally or in any particular state without
prior notice. To make an exchange, call 1-800-243-2729. Although it has not been
a problem in the past, shareholders should be aware that a telephone exchange
may be difficult during periods of major economic or market changes.

SYSTEMATIC CASH WITHDRAWAL PLAN. A shareholder who has invested a minimum
of $5,000 in the Fund, or whose shares have attained that value, may request a
transfer of his shares to a Value Line Systematic Cash Withdrawal Account which
NFDS will maintain in his name on the Fund's books. Under the Systematic Cash
Withdrawal Plan ("the Plan"), the shareholder will request that NFDS, acting as
his agent, redeem monthly or quarterly a sufficient number of shares to provide
for payment to him, or someone he designates, of any specified dollar amount
(minimum $25). All certificated shares must be placed on deposit under the Plan
and dividends and capital gains distributions, if any, are automatically
reinvested at net asset value. The Plan will automatically terminate when all
shares in the account have been redeemed. The shareholder may at any time
terminate the Plan, change the amount of the regular payment, or request
liquidation of the balance of his account on written notice to NFDS. The Fund
may terminate the Plan at any time on written notice to the shareholder.

QUALIFIED RETIREMENT PLANS. Shares of the Fund may be purchased for various
types of retirement plans. For more complete information, contact Value Line
Securities, Inc. at 1-800-223-0818 during New York business hours.

ADDITIONAL INFORMATION

The Fund is an open-end, diversified management investment company
incorporated in Maryland in 1995. The Fund has 50 million authorized shares of
common stock, $.01 par value. Each share has one vote with fractional shares
voting proportionately. Shares have no preemptive rights, are freely
transferable, are entitled to dividends as declared by the Directors, and, if
the Fund were liquidated, would receive the net assets of the Fund.

INQUIRIES. All inquiries regarding the Fund should be directed to the Fund
at the telephone numbers or address set forth on the cover page of this
Prospectus. Inquiries from shareholders regarding their accounts and account
balances should be directed to NFDS, servicing agent for State Street Bank and
Trust Company, the Fund's transfer agent, at 1-800-243-2729. Shareholders should
note they may be required to pay a fee for special requests such as historical
transcripts of an account. The Fund's Info-Line (1-800-243-2739) provides the
latest account information 24 hours a day, every day, and is available to
shareholders with pushbutton phones. The Fund's Annual Report contains a
discussion of the Fund's performance and will be made available upon request and
without charge.

SHAREHOLDER MEETINGS. The Fund does not intend to hold routine annual
meetings of shareholders. However, special meetings of shareholders will be held
as required by law, for purposes such as changing fundamental policies or
approving an advisory agreement. Shareholders of record of not less than a
majority of the outstanding shares of the Fund may remove a Director by votes
cast in person or by proxy at a meeting called for that purpose. The Directors
are required to call a meeting of shareholders for the purpose of voting upon
the question of the removal of any Director when so requested by the
shareholders of record of not less than 10% of the Fund's outstanding shares.

YEAR 2000. Like other mutual funds, the Fund could be adversely affected if
the computer systems used by the Adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Adviser
is taking steps that it believes are reasonably designed to address the Year
2000

13
<PAGE>

Problem with respect to the computer systems that it uses and to obtain
satisfactory assurances that comparable steps are being taken by the Fund's
other major service providers. At this time, however, there can be no assurance
that these steps will be sufficient to avoid any adverse impact to the Fund.

The Year 2000 Problem is expected to impact corporations, which may include
issuers of portfolio securities held by the Fund, to varying degrees based upon
various factors, including, but not limited to, the corporation's industry
sector and degree of technological sophistication. The Fund is unable to predict
what impact, if any, the Year 2000 Problem will have on issuers of the portfolio
securities held by the Fund.

14
<PAGE>
THE VALUE LINE FAMILY OF FUNDS
- -------------------------------------------

1950--THE VALUE LINE FUND seeks long-term growth of capital along with modest
current income by investing substantially all of its assets in common stocks or
securities convertible into common stock.
1952--THE VALUE LINE INCOME FUND'S primary investment objective is income, as
high and dependable as is consistent with reasonable growth. Capital growth to
increase total return is a secondary objective.
1956--THE VALUE LINE SPECIAL SITUATIONS FUND seeks to obtain long-term growth of
capital by investing not less than 80% of its assets in "special situations". No
consideration is given to achieving current income.
1972--VALUE LINE LEVERAGED GROWTH INVESTORS' sole investment objective is to
realize capital growth by investing substantially all of its assets in common
stocks. The Fund may borrow up to 50% of its net assets to increase its
purchasing power.
1979--THE VALUE LINE CASH FUND, a money market fund, seeks high current income
consistent with preservation of capital and liquidity.
1981--VALUE LINE U.S. GOVERNMENT SECURITIES FUND seeks maximum income without
undue risk to principal. Under normal conditions, at least 80% of the value of
its net assets will be invested in issues of the U.S. Government and its
agencies and instrumentalities.
1983--VALUE LINE CENTURION FUND* seeks long-term growth of capital as its sole
objective by investing primarily in stocks ranked 1 or 2 by Value Line for
year-ahead relative performance.
1984--THE VALUE LINE TAX EXEMPT FUND seeks to provide investors with maximum
income exempt from federal income taxes while avoiding undue risk to principal.
The Fund offers investors a choice of two portfolios: a Money Market Portfolio
and a High-Yield Portfolio.
1985--VALUE LINE CONVERTIBLE FUND seeks high current income together with
capital appreciation primarily from convertible securities ranked 1 or 2 for
year-ahead performance by The Value Line Convertible Ranking System.
1986--VALUE LINE AGGRESSIVE INCOME TRUST seeks to maximize current income by
investing in high-yielding, low-rated, fixed-income corporate securities.
1987--VALUE LINE NEW YORK TAX EXEMPT TRUST seeks to provide New York taxpayers
with maximum income exempt from New York State, New York City and federal
individual income taxes while avoiding undue risk to principal.

1987--VALUE LINE STRATEGIC ASSET MANAGEMENT TRUST* invests in stocks, bonds and
cash equivalents according to computer trend models developed by Value Line. The
objective is to professionally manage the optimal allocation of these
investments at all times.

1993--VALUE LINE SMALL-CAP GROWTH FUND invests primarily in common stocks or
securities convertible into common stock, with its primary objective being
long-term growth of capital.

1993--VALUE LINE ASSET ALLOCATION FUND seeks high total investment return,
consistent with reasonable risk. The Fund invests in stocks, bonds and money
market instruments utilizing quantitative modeling to determine the asset mix.

1995--VALUE LINE U.S. MULTINATIONAL COMPANY FUND'S investment objective is
maximum total return. It invests primarily in securities of U.S. companies that
have significant sales from international operations.

- ------------------------
* ONLY AVAILABLE THROUGH THE PURCHASE OF GUARDIAN INVESTOR, A TAX DEFERRED
VARIABLE ANNUITY, OR VALUEPLUS, A VARIABLE LIFE INSURANCE POLICY.

FOR MORE COMPLETE INFORMATION ABOUT ANY OF THE VALUE LINE FUNDS, INCLUDING
CHARGES AND EXPENSES, SEND FOR A PROSPECTUS FROM VALUE LINE SECURITIES, INC.,
220 E. 42ND STREET, NEW YORK, NEW YORK 10017-5891 OR CALL 1-800-223-0818, 24
HOURS A DAY, 7 DAYS A WEEK. READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST OR
SEND MONEY.

15
<PAGE>
INVESTMENT ADVISER
Value Line, Inc.
220 East 42nd Street
New York, NY 10017-5891

DISTRIBUTOR
Value Line Securities, Inc.
220 East 42nd Street
New York, NY 10017-5891

SHAREHOLDER SERVICING AGENT
State Street Bank and Trust Company
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141-6729

CUSTODIAN & TRANSFER AGENT
State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110

INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
1177 Avenue of the Americas
New York, NY 10036

LEGAL COUNSEL
Peter D. Lowenstein, Esq.
Two Greenwich Plaza, Suite 100
Greenwich, CT 06830

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Summary of Fund Expenses................ 2
Financial Highlights.................... 3
Investment Objective and Policies....... 4
Risk Factors............................ 7
Investment Restrictions................. 7
Management of the Fund.................. 7
Calculation of Net Asset Value.......... 8
How to Buy Shares....................... 8
Dividends, Distributions and Taxes...... 9
Performance Information................. 10
How to Redeem Shares.................... 11
Service and Distribution Plan........... 12
Investor Services....................... 12
Additional Information.................. 13
</TABLE>

-------------------------------------------
PROSPECTUS
-------------------

AUGUST 1, 1998

VALUE LINE
U.S. MULTINATIONAL
COMPANY
FUND, INC.

(800) 223-0818

[LOGO]
<PAGE>
VALUE LINE U.S. MULTINATIONAL COMPANY FUND, INC.

220 East 42nd Street, New York, New York 10017-5891
1-800-223-0818 or 1-800-243-2729
www.valueline.com

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

STATEMENT OF ADDITIONAL INFORMATION
AUGUST 1, 1998

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

This Statement of Additional Information is not a prospectus and must be
read in conjunction with the Prospectus of Value Line U.S. Multinational Company
Fund, Inc. (the "Fund") dated August 1, 1998, a copy of which may be obtained
without charge by writing or telephoning the Fund. The Fund's investment adviser
is Value Line, Inc. (the "Adviser").

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

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
---------
<S> <C>
Investment Objective and Policies................................................... B-1
Investment Restrictions............................................................. B-2
Directors and Officers.............................................................. B-3
The Adviser......................................................................... B-4
Brokerage Arrangements.............................................................. B-5
How to Buy Shares................................................................... B-7
How to Redeem Shares................................................................ B-7
Service and Distribution Plan....................................................... B-8
Taxes............................................................................... B-8
Performance Data.................................................................... B-11
Additional Information.............................................................. B-11
Financial Statements................................................................ B-11
</TABLE>

INVESTMENT OBJECTIVE AND POLICIES

(SEE ALSO "INVESTMENT OBJECTIVE AND POLICIES" IN THE FUND'S PROSPECTUS)

The Fund will not concentrate its investments in any particular industry but
reserves the right to invest up to 25% of its total assets (taken at market
value) in any one industry. The Fund does not invest for the purposes of
management or control of companies whose securities the Fund owns. It

B-1
<PAGE>
is the policy of the Fund to purchase and hold securities which are believed to
have potential for long-term capital appreciation. The Fund generally does not
attempt to realize short-term trading profits.

The policies set forth in the Fund's Prospectus and in this Statement of
Additional Information and the policies set forth below under "Investment
Restrictions" are, unless otherwise indicated, fundamental policies of the Fund
and, under the Investment Company Act of 1940, as amended (the "1940 Act") may
not be changed without the affirmative vote of a majority of the outstanding
voting securities of the Fund. Under the 1940 Act, a "majority of the
outstanding voting securities of the Fund" means the lesser of (1) the holders
of more than 50% of the outstanding shares of capital stock of the Fund or (2)
67% of the shares present if more than 50% of the shares are present at a
meeting in person or by proxy.

INVESTMENT RESTRICTIONS

The Fund may not:

(1) Engage in arbitrage transactions, short sales except as set forth in
the Prospectus, purchases on margin or participate on a joint or joint and
several basis in any trading account in securities.

(2) Issue senior securities or borrow money in excess of 10% of the
value of its net assets and then only as a temporary measure to meet
unusually heavy redemption requests or for other extraordinary or emergency
purposes. Securities will not be purchased while borrowings are outstanding.
No assets of the Fund may be pledged, mortgaged or otherwise encumbered,
transferred or assigned to secure a debt.

(3) Engage in the underwriting of securities, except to the extent that
the Fund may be deemed an underwriter as to restricted securities under the
Securities Act of 1933 in selling portfolio securities.

(4) Invest in real estate, mortgages, illiquid securities of real estate
investment trusts, real estate limited partnerships or interests in oil, gas
or mineral leases although the Fund may purchase securities of issuers which
engage in real estate operations.

(5) Invest in commodities or commodity contracts, including futures
contracts.

(6) Lend money except in connection with the purchase of debt
obligations or by investment in repurchase agreements, provided that
repurchase agreements maturing in more than seven days when taken together
with other securities that are illiquid or restricted by virtue of the
absence of a readily available market do not exceed 15% of the Fund's net
assets. The Fund may lend its portfolio securities to broker-dealers and
institutional investors if as a result thereof the aggregate value of all
securities loaned does not exceed 33 1/3% of the total assets of the Fund.

(7) Invest more than 5% of the value of its total assets in the
securities of any one issuer or purchase more than 10% of the outstanding
voting securities, or any other class of securities, of any one issuer. For
purposes of this restriction, all outstanding debt securities of an issuer
are

B-2
<PAGE>
considered as one class, and all preferred stock of an issuer is considered
as one class. This restriction does not apply to obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities.

(8) Purchase securities of other registered investment companies, except
in mergers or other business combinations.

(9) Invest 25% or more of its total assets in securities of issuers in
any one industry.

(10) Invest more than 5% of its total assets in securities of issuers
having a record, together with predecessors, of less than three years of
continuous operation. The restriction does not apply to any obligation
issued or guaranteed by the U.S. government, its agencies or
instrumentalities.

(11) Purchase or retain the securities of any issuer if, to the knowledge
of the Fund, those officers and directors of the Fund and of the Adviser,
who each owns more than 0.5% of the outstanding securities of such issuer,
together own more than 5% of such securities.

(12) Invest more than 2% of the value of its total assets in warrants
(valued at the lower of cost or market), except that warrants attached to
other securities are not subject to these limitations.

(13) Purchase securities for the purpose of exercising control over
another company.

If a percentage restriction is adhered to at the time of investment, a later
change in percentage resulting from changes in values or assets will not be
considered a violation of the restriction. For purposes of industry
classifications, the Fund follows the industry classifications in The Value Line
Investment Survey.

DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- --------------------------------- ---------------------- -----------------------------------------------------
<S> <C> <C>
*Jean Bernhard Buttner Chairman of the Board Chairman, President and Chief Executive Officer of
Age 63 of Directors and the Adviser and Value Line Publishing, Inc. Chairman
President and President of the Value Line Funds and Value Line
Securities, Inc.
Francis C. Oakley Director Professor of History, Williams College, 1961 to
54 Scott Hill Road present and President Emeritus since 1994; President
Williamstown, MA 01267 of Williams College, 1985-1993; Director, Berkshire
Age 66 Life Insurance Company
Marion N. Ruth Director Real Estate Executive; President, Ruth Realty (real
5 Outrider Road estate broker).
Rolling Hills, CA 90274
Age 63
Frances T. Newton Director Computer Programming Professional, Duke Power
4921 Buckingham Drive Company.
Charlotte, NC 28209
Age 57
</TABLE>

B-3
<PAGE>

<TABLE>
<CAPTION>
NAME, ADDRESS AND AGE POSITION WITH FUND PRINCIPAL OCCUPATIONS DURING PAST 5 YEARS
- --------------------------------- ---------------------- -----------------------------------------------------
<S> <C> <C>
Alan N. Hoffman Vice President Portfolio Manager with the Adviser.
Age 44
Nancy Bendig Vice President Portfolio Manager with the Adviser.
Age 42
David T. Henigson Vice President, Compliance Officer and since 1992, Vice President and
Age 40 Secretary and Director of the Adviser. Director and Vice President
Treasurer of the Distributor.
</TABLE>

- ------------------------
* "Interested" director as defined in the Investment Company Act of 1940 (the
"1940 Act").
Unless otherwise indicated, the address for each of the above is 220 East 42nd
Street, New York, NY.

Directors and certain officers of the Fund are also directors and officers
of other investment companies for which the Adviser acts as investment adviser.
The following table sets forth information regarding compensation of Directors
by the Fund and by the Fund and the three other Value Line Funds of which each
of the Directors was a director during the fiscal year ended March 31, 1998.
Directors who are officers or employees of the Adviser do not receive any
compensation from the Fund or any of the Value Line Funds.

COMPENSATION TABLE
FISCAL YEAR ENDED MARCH 31, 1997

<TABLE>
<CAPTION>
TOTAL
PENSION OR ESTIMATED COMPENSATION
RETIREMENT ANNUAL FROM FUND
AGGREGATE BENEFITS BENEFITS AND FUND
COMPENSATION ACCRUED AS PART UPON COMPLEX
NAME OF PERSON FROM FUND OF FUND EXPENSES RETIREMENT (4 FUNDS)
- ------------------------------------------- --------------- --------------------- --------------- --------------
<S> <C> <C> <C> <C>
Jean B. Buttner $ -0- N/A N/A $ -0-
Francis C. Oakley 5,834 N/A N/A 20,000
Marion N. Ruth 5,834 N/A N/A 20,000
Frances T. Newton 5,834 N/A N/A 20,000
</TABLE>

At March 31, 1998, the Adviser and its affiliates owned 1,545,239 shares or
84.7% of the outstanding shares of the Fund and Jean B. Buttner, Chairman of the
Board of Directors and President, owned 119,447 or 6.5%. Other officers and
directors owned less than 1% of the outstanding shares.

THE ADVISER

(SEE ALSO "MANAGEMENT OF THE FUND" IN THE FUND'S PROSPECTUS)

The investment advisory agreement between the Fund and the Adviser dated
September 21, 1995 provides for an advisory fee at an annual rate of 0.75% of
the Fund's average daily net assets during the year. From November 7, 1995
(commencement of operations) through March 31, 1996, advisory fees amounting to
$27,550 otherwise payable under the Agreement were voluntarily waived by the
Adviser. During the fiscal year ended March 31, 1997, the Fund paid or accrued
to the Adviser advisory fees of $114,141 of which $81,240 was voluntarily waived
by the Adviser; during the fiscal year ended March 31, 1998, the Fund paid or
accrued to the Adviser advisory fees of $188,194.

B-4
<PAGE>
The investment advisory agreement provides that the Adviser shall render
investment advisory and other services to the Fund including, at its expense,
all administrative services, office space and the services of all officers and
employees of the Fund. The Fund pays all other expenses not assumed by the
Adviser including taxes, interest, brokerage commissions, insurance premiums,
fees and expenses of the custodian and shareholder servicing agent, legal, audit
and Fund accounting expenses, fees and expenses in connection with qualification
under federal and state securities laws and costs of shareholder reports and
proxy materials. The Fund has agreed that it will use the words "Value Line" in
its name only so long as Value Line, Inc. serves as investment adviser to the
Fund.

The Adviser acts as investment adviser to 14 other investment companies
constituting The Value Line Family of Funds and furnishes investment advisory
services to private and institutional accounts with combined assets in excess of
$5 billion.

Certain of the Adviser's clients may have investment objectives similar to
the Fund and certain investments may be appropriate for the Fund and for other
clients advised by the Adviser. From time to time, a particular security may be
bought or sold for only one client or in different amounts and at different
times for more than one but less than all such clients. In addition, a
particular security may be bought for one or more clients when one or more other
clients are selling such security, or purchases or sales of the same security
may be made for two or more clients at the same time. In such event, such
transactions, to the extent practicable, will be averaged as to price and
allocated as to amount in proportion to the amount of each order. In some cases,
this procedure could have a detrimental effect on the price or amount of the
securities purchased or sold by the Fund. In other cases, however, it is
believed that the ability of the Fund to participate, to the extent permitted by
law, in volume transactions will produce better results for the Fund.

The Fund does not purchase or sell a security based solely on information
contained in any of the Value Line publications. The Adviser and/or its
affiliates, officers, directors and employees may from time to time own
securities which are also held in the portfolio of the Fund. The Adviser has
imposed rules upon itself and such persons requiring monthly reports of security
transactions for their respective accounts and restricting trading in various
types of securities in order to avoid possible conflicts of interest. The
Adviser may from time to time, directly or through affiliates, enter into
agreements to furnish for compensation special research or financial services to
companies, including services in connection with acquisitions, mergers or
financings. In the event that such agreements are in effect with respect to
issuers of securities held in the portfolio of the Fund, specific reference to
such agreements will be made in the "Schedule of Investments" in shareholder
reports of the Fund. As of the date of this Statement of Additional Information,
no such agreements exist.

BROKERAGE ARRANGEMENTS

(SEE ALSO "MANAGEMENT OF THE FUND" IN THE FUND'S PROSPECTUS)

Orders for the purchase and sale of portfolio securities are placed with
brokers and dealers who, in the judgment of the Adviser, are able to execute
them as expeditiously as possible and at the best obtainable price. Purchases
and sales of securities which are not listed or traded on a securities exchange
will ordinarily be executed with primary market makers acting as principal,
except when it is determined that better prices and executions may otherwise be
obtained. The Adviser is also authorized to place purchase or sale orders with
brokers or dealers who may charge a commission

B-5
<PAGE>

in excess of that charged by other brokers or dealers if the amount of the
commission charged is reasonable in relation to the value of the brokerage and
research services provided. Such services may include but are not limited to
information as to the availability of securities for purchase or sale;
statistical or factual information or opinions pertaining to investments; and
appraisals or evaluations of portfolio securities. Such allocation will be in
such amounts and in such proportions as the Adviser may determine. Orders may
also be placed with brokers or dealers who sell shares of the Fund or other
funds for which the Adviser acts as investment adviser, but this fact, or the
volume of such sales, is not a consideration in their selection. During the
fiscal years ended March 31, 1996, 1997 and 1998, the Fund paid brokerage
commissions of $9,982, $12,421 and $18,535 of which $8,442 (85%), $5,661 (46%)
and $13,913 (75%) was paid to Value Line Securities, Inc., the Fund's
distributor and a subsidiary of the Adviser. Value Line Securities, Inc. clears
transactions for the Fund through unaffiliated broker-dealers.

The Board of Directors has adopted procedures incorporating the standards of
Rule 17e-1 under the 1940 Act which requires that the commissions paid to Value
Line Securities, Inc. or any other "affiliated person" be "reasonable and fair"
compared to the commissions paid to other brokers in connection with comparable
transactions. The procedures require that the Adviser furnish reports to the
Directors with respect to the payment of commissions to affiliated brokers and
maintain records with respect thereto. During the fiscal year ended March 31,
1998, $17,272 (93%) of the Fund's brokerage commissions were paid to brokers or
dealers solely for their services in obtaining best prices and executions; the
balance, or $1,263 (7%), went to brokers or dealers who provided information or
services to the Adviser and, therefore, indirectly to the Fund and to
shareholders of the Value Line funds. The information and services furnished to
the Adviser include the furnishing of research reports and statistical
compilations and computations and the providing of current quotations for
securities. These services and information were furnished to the Adviser at no
cost to it; no such services or information were furnished directly to the Fund,
but certain of these services might have relieved the Fund of expenses which it
would otherwise have had to pay. Such information and services are considered by
the Adviser, and brokerage commissions are allocated in accordance with its
assessment of such information and services, but only in a manner consistent
with the placing of purchase and sale orders with brokers and/or dealers, which,
in the judgment of the Adviser, are able to execute such orders as expeditiously
as possible and at the best obtainable price. The Fund is advised that the
receipt of such information and services has not reduced in any determinable
amount the overall expenses of the Adviser.

PORTFOLIO TURNOVER. It is not expected that the Fund's annual portfolio
turnover rate will exceed 100%. A rate of portfolio turnover of 100% would occur
if all of the Fund's portfolio were replaced in a period of one year. To the
extent that the Fund engages in short-term trading in attempting to achieve its
objective, it may increase portfolio turnover and incur higher brokerage
commissions and other expenses than might otherwise be the case.

B-6
<PAGE>
HOW TO BUY SHARES

(SEE ALSO "CALCULATION OF NET ASSET VALUE", "HOW TO BUY SHARES",
"SERVICE AND DISTRIBUTION PLAN" AND "INVESTOR SERVICES" IN THE FUND'S
PROSPECTUS)

Minimum orders are $1,000 for an initial purchase and $100 for each
subsequent purchase. The Fund reserves the right to reduce or waive the minimum
purchase requirements in certain cases such as pursuant to payroll deduction
plans, etc., where subsequent and continuing purchases are contemplated.

The Fund has entered into a distribution agreement with Value Line
Securities, Inc. (the "Distributor") pursuant to which the Distributor acts as
principal underwriter and distributor of the Fund for the sale and distribution
of its shares. The Distributor is a wholly-owned subsidiary of the Adviser. For
its services under the agreement, the Distributor is not entitled to receive any
compensation. However, see "Service and Distribution Plan" for certain payments
to the Distributor. The Distributor also serves as distributor to the other
Value Line funds.

The Fund has authorized one or more brokers to accept on its behalf purchase
and redemption orders and such brokers are authorized to designate other
Intermediaries to accept purchase and redemption orders on the Fund's behalf.
The Fund will be deemed to have received a purchase or redemption order when an
authorized broker or its authorized designee accepts the order, in which event
customer orders will be priced at the Fund's net asset value next computed after
they are accepted by the authorized broker or the broker's authorized designee.

AUTOMATIC PURCHASES. The Fund offers a free service to its shareholders,
Valu-Matic, through which monthly investments of $25 or more may be made
automatically into the shareholder's Fund account. The required form to enroll
in this program is available upon request from the Distributor.

RETIREMENT PLANS. Shares of the Fund may be purchased as the investment
medium for various retirement plans. Upon request, the Distributor will provide
information regarding eligibility and permissible contributions. Because a
retirement plan is designed to provide benefits in future years, it is important
that the investment objectives of the Fund be consistent with the participant's
retirement objectives. Premature withdrawals from a retirement plan may result
in adverse tax consequences. For more complete information, contact the
Distributor at 1-800-223-0818 during New York business hours.

HOW TO REDEEM SHARES

(SEE ALSO "HOW TO REDEEM SHARES" AND "INVESTOR SERVICES" IN THE FUND'S
PROSPECTUS)

The right of redemption may be suspended, or the date of payment postponed
beyond the normal seven-day period by the Fund under the following conditions
authorized by the 1940 Act: (1) for any period (a) during which the New York
Stock Exchange is closed, other than customary weekend and holiday closing, or
(b) during which trading on the New York Stock Exchange is restricted; (2) for
any period during which an emergency exists as a result of which (a) disposal by
the Fund of securities owned by it is not reasonably practical, or (b) it is not
reasonably practical for the Fund to determine the fair value of its net assets;
(3) for such other periods as the Securities and Exchange Commission may by
order permit for the protection of the Fund's shareholders.

B-7
<PAGE>
The value of shares of the Fund on redemption may be more or less than the
shareholder's cost, depending upon the market value of the Fund's assets at the
time. Shareholders should note that if a loss has been realized on the sale of
shares of the Fund, the loss may be disallowed for tax purposes if shares of the
same Fund are purchased within (before or after) 30 days of the sale.

It is possible that conditions may exist in the future which would, in the
opinion of the Board of Directors, make it undesirable for the Fund to pay for
redemptions in cash. In such cases the Board may authorize payment to be made in
portfolio securities or other property of the Fund. However, the Fund has
obligated itself under the 1940 Act to redeem for cash all shares presented for
redemption by any one shareholder up to $250,000 (or 1% of the Fund's net assets
if that is less) in any 90-day period. Securities delivered in payment of
redemptions are valued at the same value assigned to them in computing the net
asset value per share. Shareholders receiving such securities may incur
brokerage costs on their sales.

SERVICE AND DISTRIBUTION PLAN

(SEE ALSO "SERVICE AND DISTRIBUTION PLAN" IN THE FUND'S PROSPECTUS)

The Service and Distribution Plan, adopted pursuant to Rule 12b-1 under the
Investment Company Act of 1940, provides for the payment of certain expenses
incurred by Value Line Securities, Inc. in advertising, marketing and
distributing the Fund's shares and for servicing the Fund's shareholders at an
annual rate of 0.25% of the Fund's average daily net assets. From November 17,
1995 (comencement of operations) through March 31, 1996, service fees of $9,183
otherwise payable under the Plan were voluntarily waived by the Distributor.
During the fiscal year ended March 31, 1997, the Fund paid or accrued to the
Distributor fees of $38,047 of which $27,080 were voluntarily waived; during the
fiscal year ended March 31, 1998, the Fund paid or accrued to the Distributor
fees of $62,731 under the Plan.

TAXES

(SEE "DIVIDENDS, DISTRIBUTIONS AND TAXES" IN THE FUND'S PROSPECTUS)

Set forth below is a discussion of certain U.S. federal income tax issues
concerning the Fund and the purchase, ownership and disposition of Fund shares.
This discussion does not purport to be complete or to deal with all aspects of
federal income taxation that may be relevant to shareholders in light of their
particular circumstances, nor to certain types of shareholders subject to
special treatment under the federal income tax laws. This discussion is based
upon present provisions of the Internal Revenue Code of 1986, as amended (the
"Code"), the regulations promulgated thereunder and judicial and administrative
ruling authorities, all of which are subject to change, which change may be
retroactive. Prospective investors should consult their own tax advisors with
regard to the federal tax consequences of the purchase, ownership, or
disposition of Fund shares, as well as the tax consequences arising under the
laws of any state, foreign country, or other taxing jurisdiction.

FUND STATUS. The Fund intends to qualify and elect to be treated each year
as a regulated investment company under Subchapter M of the Code. Accordingly,
the Fund generally must, among other things, (i) derive in each taxable year at
least 90% of its gross income from dividends, interest, payments from certain
securities loans and gains from the sale of stock, securities or foreign
currencies or other income (such as gains from options, futures or forward
contracts) from investing in stock, securities or currencies; and (ii) hold as
of the close of each quarter, at least 50%

B-8
<PAGE>

of its assets in certain investment assets, such as cash, U.S. Government
securities, securities of other regulated investment companies and other
securities, with such other securities limited as to any issuer to not more than
5% of the value of the Fund's total assets and 10% of the outstanding voting
securities of such issuer and hold not more than 25% of the value of the Fund's
assets in the securities of any issuer (other than U.S. Government securities or
securities of other regulated investment companies).

FUND DISTRIBUTIONS. As a regulated investment company, the Fund generally
will not be subject to U.S. federal income tax on income and gains that it
distributes to shareholders, if at least 90% of the Fund's investment company
income -- dividends, interest and net short-term capital gains in excess of net
long-term capital losses -- for the taxable year is distributed. The Fund
intends to distribute substantially all of its investment company income and net
capital gains to shareholders for federal income tax purposes although such
distributions will be automatically reinvested in additional shares of the Fund
unless the shareholder has requested otherwise.

Amounts not timely distributed by the Fund are subject to a nondeductible 4%
excise tax at the Fund level. To avoid the tax, the Fund must distribute during
a calendar year at least 98% of its ordinary income, 98% of its capital gains in
excess of capital losses for the one year period ended October 31 of such year,
and all ordinary income and capital gains for previous years that were not
distributed in earlier years. The Fund will satisfy the annual distribution
requirement if it distributes the required amount on or before December 31 of
such year or if the distribution is declared in October, November or December of
such year with a record date within such period and paid by the Fund during
January of the following calendar year. Such distributions will be taxable to
shareholders in the calendar year in which the distributions are declared,
rather than the calendar year in which the distributions are received. The Fund
anticipates that it will make sufficient timely distributions to avoid
imposition of the excise tax.

Options, futures contracts and short sales entered into by the Fund will be
subject to special tax rules. These rules may accelerate income to the Fund,
defer Fund losses, cause adjustments in the holding periods of Fund securities,
convert capital gain into ordinary income and convert short-term capital losses
into long-term capital losses. As a result, these rules could affect the amount,
timing and character of Fund distributions.

Distributions of investment company taxable income are taxable to a U.S.
shareholder as ordinary income, whether paid in cash or reinvested. Dividends
paid to a corporate shareholder may qualify for the dividends-received
deduction, to the extent such dividends are attributable to dividends received
from a U.S. corporation. It is expected that dividends from U.S. corporations
will constitute most of the Fund's gross income and that a substantial portion
of the dividends paid by the Fund will qualify for the dividends-received
deduction for corporate shareholders of the Fund. Upon request, the Fund will
advise Fund shareholders of the amount of dividends which qualify for the
dividends-received deduction.

Distributions of net capital gains (the excess of net long-term capital
gains over net short-term capital losses), if any, designated as capital gain
dividends may be taxable to individuals and certain other shareholders at the
maximum federal 20% or 28% capital gains rates (depending upon the Fund's
holding period for the assets giving rise to the capital gains), regardless of
how long the shareholder has held the Fund's shares. The maximum 20% capital
gains rate generally applies to gains from the sale of assets held for more than
18 months; the maximum 28% capital gains rate

B-9
<PAGE>

generally applies to gains from the sale of assets held for more than one year
but not more than 18 months. Capital gain from the sale of assets held for one
year or less will generally be taxed as ordinary income.

Investors purchasing Fund shares prior to a distribution should be aware of
the tax consequences of purchasing such Fund shares. The purchase price paid for
such shares may reflect the amount of the forthcoming distribution. Although
distributions from the Fund shortly after the purchase of Fund shares may be
viewed in substance as a return of capital, nevertheless, such a distribution
will be attributed to the dividend or capital gain income of the Fund and,
therefore, be taxable to the shareholder.

REDEMPTION, SALE OR EXCHANGE OF FUND SHARES. Upon a redemption or sale of
shares of the Fund, a shareholder may realize a gain or loss for federal income
tax purposes depending upon his or her basis in the shares. A gain or loss will
be treated as capital gain or loss if the shares are capital assets in the
shareholder's hands. Capital gains may be taxable to individuals and certain
other shareholders at the maximum federal 20% or 28% capital gains rate
(depending upon the shareholder's holding period for the shares). Any loss
realized on a redemption or sale of Fund shares will be disallowed to the extent
the Fund shares disposed of are replaced (including through reinvestment of
dividends) within a period of 61 days beginning 30 days before and ending 30
days after the Fund shares are disposed of. In such a case, the basis of the
Fund shares acquired will be adjusted to reflect the disallowed loss. If a
shareholder held Fund shares for six months or less and during that period
received a distribution taxable to the shareholder as long-term capital gain,
any loss realized on the sale of such Fund shares during such six-month period
would be a long-term loss to the extent of such distribution.

An exchange of shares in the Fund for shares of another Value Line fund will
be treated as a taxable sale of the exchanged Fund shares. Accordingly, a
shareholder may recognize a gain or loss for federal income tax purposes
depending upon his or her basis in the Fund shares exchanged. A gain or loss
will be treated as capital gain or loss if the shares are capital assets in the
shareholder's hands. Capital gains may be taxable to individuals and certain
other shareholders at the maximum federal 20% or 28% capital gains rate
(depending upon the shareholder's holding period for the shares). The
shareholder will have a tax basis in the newly-acquired Fund shares equal to the
amount invested and will begin a new holding period for federal income tax
purposes.

If a shareholder exchanges shares in the Fund for shares in another Value
Line fund pursuant to a reinvestment right, the sales charge incurred in the
purchase of the Fund shares exchanged may not be added to tax basis in
determining gain or loss for federal income tax purposes. Instead, the sales
charge for the exchanged Fund shares shall be added to basis for purposes of
determining gain or loss on the disposition of the newly-acquired Fund shares,
if such newly-acquired Fund shares are not disposed of in a similar exchange
transaction.

REPORTING AND BACKUP WITHHOLDING. The Fund will be required to report to
the Internal Revenue Service ("IRS") all distributions and gross proceeds from
the redemption of the Fund's shares, except in the case of certain exempt
shareholders. The Fund may be required to withhold U.S. federal income tax at
the rate of 31% of all taxable distributions and redemption proceeds payable to
shareholders who fail to provide the Fund with their correct taxpayer
identification number or to make certain certifications or who have been
notified by the IRS that they are subject to backup withholding. Corporate
shareholders and certain other shareholders specified in the Code

B-10
<PAGE>

generally are exempt from such backup withholding. Backup withholding is not an
additional tax. Any amounts withheld may be credited against the shareholder's
U.S. federal income tax. If the backup withholding provisions are applicable to
a shareholder, distributions and gross proceeds payable to such shareholder will
be reduced by the amounts required to be withheld, regardless of whether such
distributions are paid or reinvested.

PERFORMANCE DATA

From time to time, the Fund may state its total return in advertisements and
investor communications. Total return may be stated for any relevant period as
specified in the advertisement or communication. Any statements of total return
or other performance data on the Fund will be accompanied by information on the
Fund's average annual total return over the most recent four calendar quarters
and the period from the Fund's inception of operations. The Fund may also
advertise aggregate annual total return information over different periods of
time.

The Fund's average annual total return is determined by reference to a
hypothetical $1,000 investment that includes capital appreciation and
depreciation for the stated period, according to the following formula:

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

<TABLE>
<S> <C> <C> <C>
Where: P = a hypothetical initial purchase order of $1,000
T = average annual total return
n = number of years
ERV = ending redeemable value of the hypothetical $1,000 purchase at
the end of the period.
</TABLE>

ADDITIONAL INFORMATION

EXPERTS

The financial statements of the Fund and the financial highlights included
in the Fund's Annual Report to Shareholders and incorporated by reference in
this Statement of Additional Information have been so incorporated by reference
in reliance on the report of PricewaterhouseCoopers LLP, independent
accountants, given on the authority of said firm as experts in accounting and
auditing.

CUSTODIAN

The Fund employs State Street Bank and Trust Company, Boston, MA as
custodian for the Fund. The custodian's responsibilities include safeguarding
and controlling the Fund's cash and securities, handling the receipt and
delivery of securities and collecting interest and dividends on the Fund's
investments. The custodian does not determine the investment policies of the
Fund or decide which securities the Fund will buy or sell.

FINANCIAL STATEMENTS

The Fund's financial statements and financial highlights appearing in the
1998 Annual Report to Shareholders and the report thereon of
PricewaterhouseCoopers LLP, independent accountants, appearing therein, are
incorporated by reference in this Statement of Additional Information.

The Fund's 1998 Annual Report to Shareholders is enclosed with this
Statement of Additional Information.

B-11
<PAGE>
VALUE LINE U.S. MULTINATIONAL COMPANY FUND, INC.

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

a. Financial Statements
Included in Part A of this Registration Statement

Financial Highlights for the period from November 17, 1995
(commencement of operations) through March 31, 1996 and for the two
years in the period ended March 31, 1998.

Included in Part B of this Registration Statement:*

Schedule of Investments at March 31, 1998
Statement of Assets and Liabilities at March 31, 1998
Statement of Operations for the year ended March 31, 1998
Statement of Changes in Net Assets for the period from November 17,
1995 through March 31, 1996 and for the years ended March 31, 1997
and 1998.
Notes to Financial Statements
Report of Independent Accountants

Statements, schedules and historical information other than those listed
above have been omitted since they are either not applicable or are not
required.
- ------------------------

*Incorporated by reference from the Annual Report to Shareholders for the period
ended March 31, 1998.

b. Exhibits

16. Calculation of Performance Data -- Exhibit 1

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

None

ITEM 26. NUMBER OF HOLDERS OF SECURITIES

As of March 31, 1998, there were 382 record holders of the Registrant's
Capital Stock ($.01 par value).

ITEM 27. INDEMNIFICATION.

Incorporation by Reference from Pre-Effective Amendment No. 1 (filed on
September 29, 1995).

C-1
<PAGE>
ITEM 28. BUSINESS OR OTHER CONNECTIONS OF INVESTMENT ADVISER.

Value Line, Inc., Registrant's investment adviser, acts as investment
adviser for a number of individuals, trusts, corporations and institutions, in
addition to the registered investment companies in the Value Line Family of
Funds listed in Item 29.

<TABLE>
<CAPTION>
POSITION WITH
NAME THE ADVISER OTHER EMPLOYMENT
- ---------------------------- ---------------------------------- ------------------------------------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Board, President, Chairman of the Board and Chief Executive
and Chief Executive Officer Officer of Arnold Bernhard & Co., Inc. 220 East
42nd Street, New York, NY 10017; Chairman of
each of the Value Line Funds and the Distributor

Samuel Eisenstadt Senior Vice President and Director ----------------------------------------------

David T. Henigson Vice President, Treasurer and Vice President and a Director of Arnold Bernhard
Director & Co., Inc. and the Distributor

Howard A. Brecher Vice President, Secretary and Vice President, Secretary, Treasurer and a
Director Director of Arnold Bernhard & Co., Inc.

Harold Bernard, Jr. Director Retired Administrative Law Judge

William S. Kanaga Director Retired Chairman of Arthur Young (now Ernst &
Young)

W. Scott Thomas Director Partner, Brobeck, Phleger & Harrison, attor-
neys, One Market Plaza, San Francisco, CA 94105.

Linda S. Wilson Director President, Radcliffe College, 10 Garden Street,
Cambridge, MA 02138
</TABLE>

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) Value Line Securities, Inc., acts as principal underwriter for the
following Value Line funds: The Value Line Fund, Inc.; The Value Line
Income Fund, Inc.; The Value Line Special Situations Fund, Inc.; Value
Line Leverage Growth Investors, Inc.; The Value Line Cash Fund, Inc.;
Value Line U.S. Government Securities Fund, Inc.; Value Line Centurion
Fund, Inc.; The Value Line Tax Exempt Fund, Inc.; Value Line Convertible
Fund, Inc.; Value Line Aggressive Income Trust; Value Line New York Tax
Exempt Trust; Value Line Strategic Asset Management Trust; Value Line
Small-Cap Growth Fund, Inc.; Value Line Asset Allocation Fund, Inc.;
Value Line U.S. Multinational Company Fund, Inc.

C-2
<PAGE>
(b)

<TABLE>
<CAPTION>
(2)
POSITION AND (3)
(1) OFFICES POSITION AND
NAME AND PRINCIPAL WITH VALUE LINE OFFICES WITH
BUSINESS ADDRESS SECURITIES, INC. REGISTRANT
--------------------- --------------------- ---------------------
<S> <C> <C>
Jean Bernhard Buttner Chairman of the Board Chairman of the Board
and President

David T. Henigson Vice President, Vice President,
Secretary, Treasurer Secretary and
and Director Treasurer

Stephen LaRosa Asst. Vice President Asst. Treasurer

The business address of each of the officers and directors is 220
East 42nd Street, New York, NY 10017-5891.
</TABLE>

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

Value Line, Inc.
220 East 42nd Street
New York, NY 10017
For records pursuant to:
Rule 31a-1(b)(4),(5),(6),(7),(10),(11)
Rule 31a-1(f)

State Street Bank and Trust Company
c/o NFDS
P.O. Box 419729
Kansas City, MO 64141
For records pursuant to Rule 31a-1(b)(2)(iv)

State Street Bank and Trust Company
225 Franklin Street
Boston, MA 02110
For all other records

ITEM 31. MANAGEMENT SERVICES.

None.

ITEM 32. UNDERTAKINGS.

Registrant undertakes to furnish 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-3
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Prospectus and
Statement of Additional Information, constituting parts of this Post-Effective
Amendment No. 3 to the registration statement on Form N-1A (the "Registration
Statement"), of our report dated May 15, 1998, relating to the financial
statements and financial highlights appearing in the March 31, 1998 Annual
Report to Shareholders of Value Line U.S. Multinational Company Fund, Inc.,
which is also incorporated by reference into the Registration Statement. We also
consent to the references to us under the heading "Financial Highlights" in the
Prospectus and under the headings "Additional Information" and "Financial
Statements" in the Statement of Additional Information.

PRICEWATERHOUSECOOPERS LLP
1177 Avenue of the Americas
New York, New York
July 22, 1998

C-4
<PAGE>
SIGNATURES

Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies that it meets all of
the requirements for effectiveness of this Registration Statement pursuant to
Rule 485(b) under the Securities Act of 1933 and has duly caused this
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, the 22nd day of
July, 1998.

VALUE LINE U.S. MULTINATIONAL COMPANY FUND,
INC.

By /s/ DAVID T. HENIGSON
..............................................

DAVID T. HENIGSON, VICE PRESIDENT

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

<TABLE>
<CAPTION>
SIGNATURES TITLE DATE
- ------------------------------------------------------ ----------------------------- ----------------

<C> <S> <C>
Chairman of the Board; July 22, 1998
* JEAN B. BUTTNER President; Principal
JEAN B. BUTTNER Executive Officer

* FRANCIS C. OAKLEY Director July 22, 1998
FRANCIS C. OAKLEY

* MARION N. RUTH Director July 22, 1998
MARION N. RUTH

* FRANCES T. NEWTON Director July 22, 1998
FRANCES T. NEWTON

/s/ DAVID T. HENIGSON Treasurer; Principal July 22, 1998
..................................................... Financial and Accounting
DAVID T. HENIGSON Officer

*By /s/ DAVID T. HENIGSON
.....................................................
DAVID T. HENIGSON, ATTORNEY IN FACT
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VALUE LINE U.S. MULTINATIONAL
COMPANY FUND, INC.
SCHEDULE FOR COMPUTATION OF PERFORMANCE QUOTATION
EXHIBIT 16

Year(s) Ended 03/31/98: 1 year 2.37 years*
---------- ----------
Initial Investment: 1,000 1,000
Balance at End of Period: 1,392 1,745
Change: 392 745

Percentage Change: 39.17% 74.48%

Average Annual Total Return: 39.17% 26.51%

*from 11/17/95 (commencement of operations)