Underwriting services:
The investment bank can offer a firm commitment where it aggress to buy the
shares from corporation for $10 per share.
A corporation is expecting to raise 10 million*$10=$0.1 billion in total.
“Best-Offers”
The bank can offer the client a best effect arrangement where it charge a fee 20
cent for each sold share. If we assume that all shares are sold, the investment bank
obtained a total fee of $0.2*10million=$2 million.