part b

Question 3 (15 marks) ABC Inc. has 560,000 shares outstanding. Information on their issuance is as follows Date March 2017 April 2018 a. Shares issued 250,000 150,000 400,000 Issue Price $32 $35 Total Proceeds $8,000,000 $5,250,000 13,250.000 Shirley Phillips acquired 8,000 shares of the 2017 issue and 12,000 shares of the 2018 ssue Required: Determine the adjusted cost base per share, as well as the total PUC of Shirley's shares b. DEF Inc. is a CCPC with a nil GRIP balance. It has 315,000 common shares outstanding All of the shares were issued at a price of $13 per share, for total proceeds of $4,095,000. This is the PUC of these shares During 2018, the Company agrees to redeem the shares of one of its major shareholders. This shareholder holds 15,000 shares which he had acquired at a price of $10 per share. The agreed upon redemption price is $14 per share Required: Determine the tax consequences of this redemption to the shareholder