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.