Functional fixation is the view that individual investor interpret accounting information without regard for the rules used to arrive at the information. It says that investors can be misled by firms accounting methods and choices. Given that the investors perceived preoccupation with short term EPS as an indicator of company performance, it seems highly probable that the effect on the EPS will be a key consideration in the debt-equity choice, i.e. there is a functional fixation on short term EPS.The primary focus of this study is to address the question of the extent to which financing...
Functional fixation is the view that individual investor interpret accounting information without regard for the rules used to arrive at the informati...
