To calculate the spread paid by the underwriter, we need to find the difference between the amount received by XYZ from the underwriter ($22) and the offering price ($25), then divide that difference by the offering price and multiply by 100% to express the spread as a percentage.
The spread paid by the underwriter can be calculated as follows:
Spread = [(Offering Price - Underwriter Price) / Offering Price] x 100%
Spread = [(25 - 22) / 25] x 100%
Spread = 3 / 25 x 100%
Spread = 12%
Therefore, the answer is A) 12.0%.