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Financial Management: Rolls Royce Company - Essay Example
Author : haagemmie
Finance & Accounting
Pages 12 (3012 words)
This paper relates to an expansion plan of Rolls Royce, company is planning to expand in China; the overall problems that are expected to come across by this expansion are taken under consideration and the strategy that would be used to identify and reduce these problem/ threats, is also designed…
It is evidently clear from the discussion that United Kingdom based, listed on London Stock Exchange the global business Company Rolls Royce works by providing interconnected systems of power to be used on sea, air, and land. In the year 1884, Rolls Royce was founded. The headquarter of the company is in London, United Kingdom. The company is operating worldwide since its existence and it is involved in developing, and manufacturing of civil aerospace, marine aerospace, defence products, Nuclear products, energy products and operates in 50 countries. It has been one of the most reliable, trust-worthy, and reputable companies in the industry it operates. Rolls Royce has chosen for the evaluation requirement of this report. The Capital Asset Pricing Model has been developed to generate estimation over the capital assets of an organization. The model assists in evaluating asset’s generation of annual returns, and makes it possible for organizations to calculate the rate of return of an asset by incorporating non-diversifiable risk. The risk is usually a systematic risk or market risk, represented in terms of β (beta) and the rate of return of asset when no risk is associated to asset. Capital asset pricing model therefore helps organization to maintain their portfolio of assets. There are two general concepts on which the model CAPM is based including the estimation of risk associated and time value of money to be invested. ...