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Question
The State Bank of Stillwater has had record profits this year. It is interested in purchasing the National Bank of Durant because it has had losses this year. The State Bank of Stillwater feels that it can turn around the National Bank of Durant and in the meantime they can enjoy a reduced tax burden after this acquisition. What motive for a merger does this most likely reflect?
A. Profit potential
B. Risk reduction
C. Rescue of failing institution
D. Tax and market positioning
E. Maximizing management welfare
Answer
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