Merrill Lynch Balanced Capital Fund, Inc.

File No. 811-2405

Item No. 77M (Mergers) -- Attachment

During the fiscal semi-annual period ending March 31,
2001, Merrill Lynch Balanced Capital Fund, Inc. (the
"Registrant") acquired substantially all of the assets and
assumed substantially all of the liabilities of Merrill Lynch
Convertible Fund, Inc. ("Convertible"), File No. 811-4311.

At meetings of the Boards of Directors of the Registrant
and Convertible Fund, the Boards of Directors approved an
Agreement and Plan of Reorganization (the
"Reorganization").  The Reorganization referred
collectively to (i) the acquisition of substantially all of the
assets, and assumption of substantially all of the liabilities,
of Convertible Fund by the Registrant solely in exchange
for the Corresponding Shares and the subsequent
distribution of such Corresponding Shares to the
shareholders of Convertible Fund; and (ii) the subsequent
deregistration and dissolution of Convertible Fund.

On September 12, 2000, in connection with the
Reorganization, the Registrant filed a Registration
Statement on Form N-14 (File Nos. 333-40436 and 811-
2405) (the "N-14 Registration Statement").  The N-14
Registration Statement contained the proxy materials
soliciting the approval of the Reorganization by the
shareholders of Convertible Fund.  Pre-Effective
Amendment No. 1 to the N-14 Registration Statement was
filed on August 11, 2000.  The N-14 Registration Statement
as so amended was declared effective by the Commission
on September 12, 2000.

On October 10, 2000, the shareholders of the Registrant
and Convertible Fund approved the Reorganization at a
special meeting of shareholders held for that purpose.  On
December 15, 2000 (the "Reorganization Date"), pursuant
to the Agreement, Convertible Fund transferred assets
valued at $35,369,046.14 to the Registrant and received in
exchange 1,206,085.103 corresponding shares.  Such shares
were then distributed to the shareholders of Convertible
Fund on that date in proportion to each shareholder's
interest in the assets transferred.

An Application for Deregistration on Form N-8F was filed
by Convertible Fund with the Securities and Exchange
Commission.