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Your aunt understands that you are taking the course of Security Analysis in Multimedia University. She is very proud of you and wants to know

Your aunt understands that you are taking the course of Security Analysis in Multimedia University. She is very proud of you and wants to know whether she should invest in Happy and Relax Berhad that is listed in Bursa Malaysia with the following information. Happy and Relax Berhad is currently selling for RM3.88, with trailing 12 months (TTM) earnings per share (EPS), and dividends per share of RM0.88 and RM0.22, respectively. The company's price earnings ratio (P/E) is 12.5, and price to sales (P/S) is 3.8. The return on equity (ROE) is 27.0 percent, and the profit margin on sales is 12.25 percent. The risk-free rate of return is 1.6 percent, the equity risk premium is 6.6 percent, and Happy and Relax Berhad's beta is 1.60.

i)Identify and explain one advantage of P/S over P/E as a valuation tool.

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