Waecom Ltd is a telecommunications company that operates across the African continent and in some parts of Europe. Waecom has been listed on the JSE for the last 10 years. The Financial Director has noted that due to exceptional performance in 2023, the company has excess funds at its disposal.

The Financial Director wants to return some of these funds to shareholders and is considering a couple of alternatives in this regard.

Required:

a. Comment on the potential consequences of each of these courses of action, paying particular attention to how each decision will be viewed by existing and potential investors on the JSE:

(i) Declaring a special dividend at the end of the 2023 financial year.

(ii) Undertaking a share buy back scheme.

b. Assume that as part of Waecoms expansion strategy, they have recently invested in multiple subsidiaries both within and outside of South Africa. They then discover that. there are strict remittance restrictions for each of the subsidiaries that are in Europe. Advise management on potential strategies they could utilise to overcome these exchange controls.