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Issuer

An issuer is an entity, such as a corporation, government, or financial institution, that offers and sells securities, such as stocks, bonds, or other financial instruments, to raise capital. Issuers use the funds raised from these securities to finance projects, expand operations, or meet other financial needs. The issuer is responsible for fulfilling obligations to security holders, such as paying interest on bonds or dividends on stocks.

Example

A corporation issues bonds to finance the construction of a new manufacturing facility, promising to pay bondholders interest and return the principal at maturity.

Key points

• An entity that offers securities to raise capital for financing projects or operations.

• Can be a corporation, government, or financial institution.

• Responsible for fulfilling obligations to security holders, such as interest or dividends.

Quick Answers to Curious Questions

Issuers raise capital by selling securities like stocks or bonds, using the proceeds to fund projects or expand operations.

Corporations, governments, and financial institutions can all act as issuers, offering securities to investors.

Issuers must fulfill obligations such as paying interest on bonds or dividends on stocks, as well as repaying principal on debt securities at maturity.