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