Step 1: Cell Reaction:
\[
\text{Mg} + \text{Cu}^{2+} \rightarrow \text{Mg}^{2+} + \text{Cu}
\]
Step 2: Standard E.M.F. Calculation:
\[
E_{\text{cell}}^0 = E_{\text{cathode}}^0 - E_{\text{anode}}^0
\]
\[
= 0.34 - (-2.37) = 2.71V
\]
Step 3: Nernst Equation:
\[
E_{\text{cell}} = E_{\text{cell}}^0 - \frac{0.0591}{n} \log \frac{[\text{Mg}^{2+}]}{[\text{Cu}^{2+}]}
\]
\[
E_{\text{cell}} = 2.71 - \frac{0.0591}{2} \log \frac{0.1}{0.001}
\]
\[
E_{\text{cell}} = 2.71 - \frac{0.0591}{2} \times 2
\]
\[
E_{\text{cell}} = 2.71 - 0.0591 = 2.6509V
\]
Thus, the e.m.f. of the cell is 2.65V.