1) decrease or increase 2)lower or higher 3)positive and negative

The CAPM helps in determining the required return on a stock and its relation with risk. Along with variability of returns, there is another important dimension to risk-the risk of failure. From a shareholder wealth maximization perspective, the cost of failure (both direct and indirect) can be very high for the company as well as its shareholders Diversification of businesses and investments made by the company can help a firm reduce its risk and the probability of bankruptcy. This will lead to on shareholder wealth bankruptcy costs and thus will have a impact