Below question is from Introduction to federal income taxation in Canada 2016-2017 study guide edition:

Holden Limited has received an offer from an unrelated corporation, Corporate Raider Inc., to purchase all of Holdens common shares in a wholly owned subsidiary, Profits Galore Ltd. All three corporations are Canadian-controlled private corporations and have December 31 year ends

The common shares of Profits Galore Ltd have an adjusted cost base and paid-up capital of $500,000 and a fair market value of $2.4 million. Profits Galore Ltd has realized and retained income for tax purposes of $900,000 since its incorporation in 1999. All of this realized income was derived from active business assets

Holden Limited has come to you for your comments on two acquisitions alternatives proposed by Corporate Raider Inc.

Plan A would first have Profits Galore Ltd borrow from the bank $1.9 million and, then, immediately pay a dividend to its parent corporation, Holden Limited, for the same amount. Corporate Raider Inc would then purchase the common shares of Profits Galore Ltd from Holden Limited for the residual fair market value of $500,000. Then, Corporate Raider would inject 1.9 million into Profits Galore Ltd through a common share subscription so that the bank loan could be repaid

Plan B would have Holden Limited transfer its common shares in Profit Galore inc to Corporate Raider Inc on a tax-free basis by jointly electing under section 85 at a transfer price of $500,000. Holden Limited would accept as consideration only special shares of Corporate Raider Inc with a paid-up capital of $500,000 and a redemption/retraction value of $2.4 Million. These shares would represent 15%of all voting rights and fair market value of Corporate Raider Inc. Holden limited would, then, retract the special shares which it holds in Corporate Raider.

Holden Limited has asked you to describe the tax implications of the above acquisition alternatives supported by any relevant calculations