(b) John & John Corporation currently sells at a price-earnings multiple of 10. The firm has 2.5 million shares outstanding, and sells at a price per share of $45. HNK Corporation has a P/E multiple of 6, has 1.5 million shares outstanding, and sells at a price per share of $15. John & John Corporation acquires HNK by exchanging one of its shares for every three of HNK's share and there is no synergy of this takeover. (0) What will happen to John & John's price per share if the market does not realize that the P/E ratio of the merged firm ought to differ from John & John's P/E ratio before the takeover. Show your calculation. [20 marks] (ii) How are the gains from the merger split between shareholders of the two firms if the market is fooled as in part (b)(i)? Show your calculation. [10 marks]