Multiple Choice
When considering the impact of distress costs on capital structure,which of the following facts should lead ABC Corporation to set a higher target debt ratio than XYZ Corporation (all else equal) ?
A) ABC's cash flows from operations are less volatile than XYZ's.
B) ABC is a computer software firm,and XYZ is an electric utility.
C) ABC operates in a more competitive industry than XYZ.
D) ABC's assets have lower resale values than XYZ's assets.
Correct Answer:
Verified
Correct Answer:
Verified
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