Company: GDV-PK
Filing Date: 2025-08-08
Form Type: N-14
Source: 0001829126-25-006008
Chunk: 74

Company: GABELLI DIVIDEND & INCOME TRUST
Filing Date: 2025-08-08
Form: N-14
Chunk 74
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 of borrowed securities occurs at a time when other short-sellers of the security are receiving similar requests, a “short squeeze” can occur, and a Fund may be compelled to replace borrowed securities previously sold short with purchases on the open market at the most disadvantageous time, possibly at prices significantly in excess of the proceeds received at the time the securities were originally sold short.

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In September 2008, in response to spreading turmoil in the financial markets, the SEC temporarily banned short selling in the stocks of numerous financial services companies, and also promulgated new disclosure requirements with respect to short positions held by investment managers. The SEC’s temporary ban on short selling of such stocks has since expired, but should similar restrictions and/or additional disclosure requirements be promulgated, especially if market turmoil occurs, the Funds may be forced to cover short positions more quickly than otherwise intended and may suffer losses as a result. Such restrictions may also adversely affect the ability of the Funds to execute their investment strategies generally. Similar emergency orders were also instituted in non-U.S. markets in response to increased volatility. The Funds’ ability to engage in short sales is also restricted by various regulatory requirements relating to short sales.

Leverage Risk.Dividend
currently uses financial leverage, and Preferred Trust will use financial leverage, for investment purposes by issuing preferred shares,
and each Fund is also permitted to use other types of financial leverage, such as through the issuance of debt securities or borrowings
from financial institutions. As of December 31, 2024, the amount of leverage represented approximately 16% of the Dividend’s
net assets. As provided in the 1940 Act and subject to certain exceptions, each Fund may issue additional senior securities (which may
be stock, such as preferred shares, and/or securities representing debt) only if immediately after such issuance the value of the Fund’s
total assets, less certain ordinary course liabilities, exceeds 300% of the amount of the debt outstanding and exceeds 200% of the amount
of preferred shares and debt outstanding.

Each Fund’s leveraged capital structure creates special risks not associated with unleveraged funds that have a similar investment objective and policies. These include the possibility of greater loss and the likelihood of higher volatility of the net asset value of each Fund and the asset coverage for any preferred shares or debt outstanding. Such volatility may increase the likelihood of each Fund having to sell investments in order to meet its obligations to make distributions on the preferred shares or principal or interest payments on debt