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Does diversification achieved through a merger create value? Why or why not?A) Yes, diversification lowers the volatility of a firm's earnings which, increases the firm's value to shareholders.B) Yes, diversification lowers the total risk of a firm which, provides a compensable benefit.C) Yes, diversification increases a firm's earnings which, creates value for the firm.D) No, diversification lowers unsystematic risk but has no real value to shareholders.E) No, diversification lowers a firm's earnings and thus destroys value.
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