14) A company plans to raise funds by offering its shares to the public, and it intends to use an offer for sale at a fixed price to sell one million shares. (a) Describe how it can use underwriting to guard against the shares being under-subscribed. [3 marks] Suppose that as a sub-underwriter, an institution underwrites 50% of the issue. (b) Explain how the institution could profit or incur a loss from the sub-underwriting arrangement if the issue is: (i) successful and all the shares are purchased by the public. (ii) unsuccessful and only 80% of the shares are purchased. [3 marks] [Total 6 marks]