Memorandum: Business Expansion Financial Alternatives Analysis

This memorandum, prepared by a financial consultant, addresses alternative funding strategies for a company's overseas business expansion. It begins by examining share buybacks, discussing their impact on shareholders and the company, including the reduction of outstanding shares and signaling management confidence. The report then differentiates between cumulative and non-cumulative preference shares, highlighting their dividend payment structures. Further, it contrasts convertible and non-convertible preference shares, emphasizing the shareholder's option to convert to ordinary shares. Finally, the report analyzes the effect of convertible preference shares on earnings per share (EPS), considering the impact of potential share conversion on the calculation. The conclusion recommends issuing non-cumulative and convertible preference shares as a suitable external funding method for expansion. References from Wise-owl.com, Zacks.com, and efinancemanagement.com support the analysis.