Does Diversification Achieved Through a Merger Create Value? Why or Why

Multiple Choice

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.