Use the Information for the Question(s) Below

question 66

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 hand held 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 raise the $100 million through the issuance of new shares prior to the release of the new video game.The number of new shares that EGI will issue is closest to:

• A) 5.0 million
• B) 6.25 million
• C) 10.0 million
• D) 1.6 million

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Definitions:

Mature Learners

Adults who engage in the learning process, either for personal development, professional advancement, or returning to education later in life.

General Knowledge

Broad, non-specialized information and awareness about a wide range of topics, facts, and concepts.

Middle Adulthood

A life stage typically ranging from about 40 to 65 years, characterized by stability, maturity, and increased responsibility.

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The ability to use learned knowledge and experience. It typically increases with age and is measured by vocabulary and trivia tests.