Scott joined the Finance Discipline group as a fractional-time associate lecturer. He most recently completed a PhD in finance titled “Repeated Dividend Increases: A Collection of Four Essays". His PhD continues his long-standing research track record that explores all aspects of cash dividends distributed by listed firms, both in Australia and the United States.
Can supervise: YES
Business finance, capital budgeting and valuation.
Michayluk, D, Neuhauser, K & Walker, S 2014, 'Are Certain Dividend Increases Predictable? The Effect of Repeated Dividend Increases on Market Returns', Journal of Applied Corporate Finance, vol. 26, no. 4, pp. 118-126.View/Download from: UTS OPUS or Publisher's site
The authors report the findings of their study of over 400 stocks of public companies that announced at least 20 consecutive increases in their dividends during the period 1999 and 2009. With the assumption that the stock market learns to anticipate future dividend increases from current patterns, the study was designed to answer the question: How many increases does it take for the market to anticipate, and 'price in,' the pattern of dividend increases?
The authors report finding that abnormal returns around the first and second announcements of dividend increases are significant and positive, but are much less significant for the third and further increases. They also find that the size of the dividend increases tends to fall with more increases, and that the largest percentage dividend changes occur early in the sequence.
Predicting the price at which a stock will first list on a stock exchange is not an easy task. In this paper we present a market valuation of Optus based on data available before the listing date. As a by-product of our analysis we provide a method of valuing some non-renounceable rights issues. The valuation of Optus is based on the price behaviour of shares in Mayne Nickless. A large tranche of the Optus shares were to be made available through a non-renounceable e~titlement offer to shareholders in Mayne NIckless. In principle, by observing the exentitlement price drop on Mayne Nickless shares, an estimate can be made of the value of Optus. In reality there are complications in this approach. For example, Mayne Nickless went ex-dividend and ex-entitlement on the same day. We overcome these problems by utilising price differences from concurrent trading in Mayne Nickless shares, ex-dividend/exentitlement, and ex-dividend/cum-entitlement.
Pettway, R, Thosar, SB & Walker, S 2008, 'Auctions versus book-built IPOs in Japan: A comparison of aftermarket volatility', Pacific-Basin Finance Journal, vol. 16, no. 3, pp. 224-235.View/Download from: UTS OPUS or Publisher's site
In a recent theoretical paper, Sherman [Sherman, A.E., 2005, Global trends in IPO methods: Book building versus auctions with endogenous entry, Journal of Financial Economics 78, 615649.] proposes that: If book building leads to greater expected underpricing relative to uniform price or discriminatory auctions, then it should also lead to less volatility in aftermarket trading. In this paper, we study a Japanese sample and find that book-built IPOs exhibit greater underpricing and higher aftermarket volatility compared to price-discriminatory auctions. Aftermarket volatility wanes with seasoning in both sub-samples, but the book-built volatility levels are persistently higher than those for auctions for as long as one year after the IPO issue date.
Partington, G & Walker, S 2001, 'A Note on Transaction Costs & the Interpretation of Dividend Drop-off Ratios', Accounting & Finance, vol. 41, no. 3, pp. 229-241.View/Download from: UTS OPUS or Publisher's site
Walker, S & Partington, G 1999, 'The Value of Dividends: Evidence from Cum-Dividend Trading in the Ex-Dividend Period', Accounting and Finance, vol. 39, no. 3, pp. 275-296.
What is the market value of a dollar of fully franked dividends? We address this question by exploiting a new phenomenon in the Australian capital marketthe trading of shares cum-dividend during the ex-dividend period. This allows a relatively clean measurement of the combined value of dividends and the associated tax effects net of transactions costs. Consistent with the theoretical model that we develop, the evidence from this sample is that one dollar of fully franked dividends, after tax effects and transaction costs, is worth significantly more than one dollar. We also show that, in contrast to our measure, the traditional measure of the ex-dividend price drop-off, based on close to close prices, has a lower average value and exhibits substantially more cross sectional variation.
Walker, S & Michayluk, D 2013, 'How Long Does It Take to Establish a Dividend Reputation?', Paris Financial Management Conference - 2013, Paris Financial Management Conference, Paris, France.
Michayluk, D, Neuhauser, K & Walker, S 2010, 'Are certain dividend increases predictable? The effect of repeated dividend increases on market returns', Financial Management Association 2010 Meetings, Financial Management Association Annual Meeting, Financial Management Association, New York, USA, pp. 1-38.View/Download from: UTS OPUS
Positive abnormal returns around dividend increase announcements are well documented. The conventional explanation for these abnormal returns is that a dividend increase conveys favorable information about a firms prospects causing the stock price to increase in response to the announcement. This study offers a new perspective by studying a special group of firms that consistently increase their dividends each year. Abnormal returns around each dividend increase announcement are investigated based on the number of consecutive annual increases. In light of survey results that indicate firms endeavor to maintain steady dividend payments, one hypothesis is that after a certain number of dividend increases, a firm may develop a reputation as a dividend-increasing firm and consequently the market will learn to anticipate future dividend increases. Consistent with this hypothesis, we find that abnormal returns are significantly positive for the first and second dividend increase. Returns are not significant for all other increases, with the exception of the ninth consecutive increase. Our results suggest that, by the third consecutive increase, the market has learned to expect further increases. Our findings are robust and provide further evidence that, consistent with other types of corporate announcements, the stock market reacts differently depending on the frequency of an action.
Pettway, R, Thosar, SB & Walker, S 2006, 'Auctions versus book-built IPOs: Further evidence', Proceedings of the 2006 FMA Annual Meeting, FMA Annual Meeting, FMA, Salt Lake City, USA, pp. 1-31.
Rahman, N & Walker, S 2005, 'The effect of acquisition method on shareholder wealth', 18th Australasian Finance and Banking Conference, Australasian Finance and Banking Conference, -, Sydney, Australia.
Partington, G & Walker, S 2000, 'A theory of ex-dividend equilibrium under imputation and some empirical resuls', Accounting Association of Australia and New Zealand Conference, Hamilton Island, Queensland, Australia.
Partington, G & Walker, S 2000, 'A theoretical model of dividend valuation in Australia', Accounting Association of Australia and New Zealand Conference, Hamilton Island, Queensland, Australia.
Partington, G & Walker, S 1999, 'Optus: A market valuation pre-listing', Accounting Association of Australia and New Zealand Conference, Cairns, Queensland, Australia.
Partington, G & Walker, S 1999, 'The 45-day rule: The pricing of dividends and the crackdown on trading in imputation credits', Accounting Association of Australia and New Zealand Conference, Cairns, Queensland, Australia.
Walker, S & Partington, G 1997, 'The ex-dividend drop-off: Evidence from cum-dividend trading in the ex-dividend period', Accounting Association of Australia and New Zealand Conference, Hobart, Tasmania, Australia.
Walker, S 1997, 'The ex-dividend drop-off: Estimating the value of dividends from cum-dividend trading in the ex-dividend period', Seminar Presentation, School of Finance and Economics, University of Technology, Sydney, Sydney, Australia.