Hi Mack, first of all, lets hope there is no Scenario 3, the opposite information about a deposit!

I dug up a paragraph from an old post (by Colder), when we were dicussing the same thing in the past. Dividends vs capital gains.

It all depends on where you live. From a tax perspective, Alberta is where you want to be. Dividend income is 17.72%, while on capital gains it is 19.5%. In BC dividend is 23.91%, while cap gain is 21.85%. Ontario dividend is 23.2%, cap gain is 28.19%. Nova Scotia dividend is 34.85%, while cap gain is 25%. So clearly if you live in NS, you do not want the buy out to be paid as a dividend.