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CFA Level II
#1

which of the following is a disadvantage of using price-to-sales multiples in stock valuations? a) it is difficult to capture the effects of chances in pricing policies using PS b) PS multiples are more volatile than PE multiples c) the use of PS multiples can miss problems associated with cost control

#2

A? lol I don’t know if it’s C or A.

#3

I think C also…

#4

C

#5

SkipE99 Wrote: ------------------------------------------------------- > which of the following is a disadvantage of using > price-to-sales multiples in stock valuations? > > a) it is difficult to capture the effects of > chances in pricing policies using PS > b) PS multiples are more volatile than PE > multiples > c) the use of PS multiples can miss problems > associated with cost control chances in a = changes

#6

c

#7

C Due to the stability of using sales relative to earnings in the PS multiple, an analyst may miss problems of troubled firms concerning its cost control. PS multiples are actually less volatile than PE ratios, which is an advantage in using the PS multiple. Also, PS ratios provide a useful framework for evaluating effects of pricing changes on firm value.

#8

A or C? lol

#9

a is a double negative which is a disadvantage? the question reads it is difficult to…