Use the Information for the Question(s)below

question 24

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.EGI's share price following the release of the new video game will be closest to:

• A)$18.00.
• B)$20.00.
• C)$16.00.
• D)$19.00.

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Definitions:

Epidemiological Transition

Refers to the shift from a society characterized by infectious and parasitic disease and low life expectancy to a society where chronic and degenerative diseases dominate and life expectancy is high.

Parasitic Diseases

Illnesses caused by parasites, organisms that live on or in a host organism and benefit at the host's expense.

Degenerative Diseases

Conditions that involve the gradual deterioration of body functions, often associated with aging.

American Medical Association

A professional association and lobbying group for physicians and medical students in the United States that promotes the art and science of medicine for the betterment of public health.