10. Avtech is a multinational distributor of semiconductor chips and related products to businesses. Its leading competitor around the world is Target Electronics. Avtech has a current market price of $10, 20 million shares outstanding, annual sales of $1 billion, and a 5 percent profit margin. Target has amarket price of $20, 30 million shares outstanding, annual sales of $1.6 billion, and a profit margin of 4.9 percent. Based on the information given, answer the following questions:

A. Which of the two companies has a more attractive valuation based on P/S?

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