Positive Change of Earnings Per Share and Share Price: Functional Fixation Hypothesis

Subject Areas : Management Accounting

بهمن  بنی مهد ¹ (ندارد)
مهدی  مراد زاده فرد ² (ندارد)
فاطمه  مروارید عراقی ³ (ندارد)

Received: 2013-09-14 Accepted : 2013-12-01 Published : 2014-05-20

Keywords: Functional Fixation Hypothesis, earnings management, Share Price and Stock&#x0D, &#x0D, Exchan,

Abstract :

The objective of this study is to investigate functional fixation hypothesis in the TehranStock Exchange(TSE). Functional fixation hypothesis will be study from differentapproaches. In this study , we first examine above hypothesis by investigating relationshipbetween positive change of earnings per share and share price, second, by relationshipbetween earnings management and share price. Sample of study are 100 firms during a 6-year period from 2005 to 2011. Using correlation method and multiple linear regressiontechnique, the results of this study show that there is a positive relation between positivechange of earnings per share and share price. Research evidence also show a positiverelation between earnings management and share price. This issue confirm functionalfixation hypothesis in TSE .