Wilikens Ltd manufactures and sells bespoke shoes in their own retail outlets. The company can be considered as mature and is past its growth phase. Wilikens Ltd has been retaining cash reserves over the past few years, leading to a debt/equity ratio that is much lower than its target ratio as declared in the companys integrated report. The management of Wilikens Ltd also believes that the shares of the company are under-priced at the moment and is planning a share buy-back programme for the coming three years. Some of the managers, however, argued that the company should rather increase their dividends or pay out a special dividend.

Briefly provide an argument in favour of a share buy-back for Wilikens Ltd opposed to an increase in dividends or a special dividend, ignoring any tax implications.