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The Computershare Limited share price just hit a record high on US tax breaks

Shareholders in Computershare Limited (ASX: CPU) will be pleased today after the share registry business hit a record high of $16.99 today after the group announced it expected a net profit benefit from tax cuts pushed through Congress by the administration of President Trump.

The US corporate tax rate is set to be cut from 35% to 21%, although Computershare flagged that the reforms would also eliminate certain tax deductions currently available to it.

Computershare is also a beneficiary of rising US cash and debt rates more generally as a large proportion of the cash it looks after on behalf of clients it reinvests in risk-free money market instruments in order to generate greater returns. Computershare recently suggested FY 2018 earnings per share should come in 10% above the prior year, although with the upcoming tax breaks it could beat that forecast.

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Motley Fool contributor Tom Richardson has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Computershare. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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