cost and benefits on alternative sources of finance

Question 2 ...found this on the net...

"Mezzanine debt is a type of borrowing by a public company in which the lender has a particularly low claim on the company's assets in the event that it goes into liquidation before the debt is settled. In this situation, the lender's claim will be of a lower priority to all other creditors except for holders of common stock. As a result, this type of debt tends to carry higher costs for the lender than other types of borrowing."

csandi's definition is correct.

Mezzanine debt is unsecured borrowing. It is called mezzanine because if a company winds up, secured debt is paid off first, then any unsecured debt, and then (if there is anything left) equity.