Final answer:
The amount raised by Whipple Corporation through bond sales would be calculated by finding the present value of all future coupon payments and the par value at maturity, using the YTM as the discount rate. Without specific calculations, the exact amount cannot be provided.
Step-by-step explanation:
The question asks how much money Whipple Corporation raised from the sale of its bonds, which have a par value of $2,000, a coupon rate of 6.26% paid semiannually, a yield to maturity (YTM) of 6.70%, and a maturity of 25 years. To determine the amount raised, we need to calculate the present value of the bond issue using the YTM as the discount rate since the actual money raised will typically be the present value at the time the bonds are sold. We must find the present value of all future coupon payments, as well as the present value of the par value, which will be repaid at the end of 25 years. However, without the actual calculations or Table C2 provided with the question, we cannot provide the exact amount raised.
For a simplified example, consider a two-year bond with a $3,000 par value and an 8% coupon rate. At a discount rate of 8%, the present value of the bond would be equal to its face value. If the discount rate increases to 11%, the present value will be less than the face value, reflecting the bond's reduced price in the market due to higher prevailing interest rates.