If the parent first undertakes an estate freeze of their interest in a corporation by exchanging common shares for preferred shares, which of the following statements is false?

Multiple Choice

• The value of the preferred shares would eventually be subject to tax.

• The value of the preferred shares would not grow beyond their value when issued.

• In a growing business, the parent's ultimate tax liability would be less than it would have been if parent had continued to hold the common shares.

• The parent would receive less than the current full value for the company and would therefore reduce their tax liability.