Which of the following is a disadvantage of using price-to-sales (P/S) multiples in stock valuations?
A) It is difficult to capture the effects of changes in pricing policies using P/S ratios.
B) P/S multiples are more volatile than price-to-earnings (P/E) multiples.
C) The use of P/S multiples can miss problems associated with cost control.
Answer: C
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