This case involves the privatization and initial public offering undertaken by Deutsche Telekom in 1996. Emphasis will be placed upon the underwriting process and the pricing of an offering for domestic and international distribution.

Please read the case study and try to answer the following questions:

• What price does the case say an investor would pay for a share of Deutsche Telekom? The underwriters?
• What is the "book value" per share of Deutsche Telekom?
• What alternative valuation methods could be used to figure out the company's value?
• What is the underwriting process for equities like this, and how does it differ from bond underwriting and distribution?
• What risk would an investor face?
• What risk does the underwriter face?