The Arthur Corporation is considering acquiring the Barber Corporation. The data for the two companies are as follows: Arthur Corp. Barber Corp. Total earnings $1,000,000 $4,000,000 Number of shares of stock outstanding 400,000 2,000,000 Earnings per share $2.50 $2.00 Price-earnings ratio (P/E) 12 15 Market price per share $30 $30 a. The BarberCorp. is going to give Arthur Corp. a 50 percent premium over Arthurs current market value. What price will it pay? b. At the price computed in part a, what is the total market value of Arthur Corp.? (Use the number of Arthur Corp. shares times price.) c. At the price computed in part a, what is the P/E ratio Barber Corp. is assigning Arthur Corp? d. How many shares must Barber Corp. issue to buy the Arthur Corp. at the total value computed in part b? (Keep in mind that Barber Corp.s price per share is $30.) e. Given the answer to part d, how many shares will Barber Corp. have after the merger? f. Add together the total earnings of both corporations and divide by the total shares computed in part e. What are the new postmerger earnings per share? g. Why has Barber Corp.s earnings per share gone down? h. How can Barber Corp. hope to overcome this dilution?