Use the Information for the Question(s)below

question 22

Multiple Choice

Use the information for the question(s) below.
Electronic Gaming Incorporated (EGI) is a firm with no debt and its 20 million shares are currently trading for $16 per share.Based on the prospects for EGI's new handheld video game,management feels the true value of the firm is $20 per share.Management believes that the share price will reflect this higher value after the video game is released next fall.EGI has already announced plans to raise $100 million from investors to build a new factory.
-Assume that EGI decides to wait until after the release of the new video game before they raise the $100 million through the issuance of new shares.The number of new shares that EGI will issue is closest to:

• A)1.6 million.
• B)5.0 million.
• C)10 million.
• D)6.25 million.

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Definitions:

Invertebrates

Multicellular organisms that lack a vertebral column or backbone.

Density Dependent

Variables that have varying impacts on population growth or size, depending on how densely the population is distributed.

Density Independent

Referring to factors that affect population sizes regardless of the population density, such as weather conditions or natural disasters.

Density Dependent

Factors whose effects on the size or growth of the population vary with the population density, such as availability of food, predation, disease, and migration.