Which of the following is NOT considered a debt financing alternative?

Preferred stock is the correct choice as it is not categorized strictly as a debt financing alternative. Instead, it is considered an equity instrument because it represents an ownership stake in a company. While preferred stock does have debt-like characteristics, such as fixed dividend payments and a senior claim on assets compared to common equity, it does not create a legal obligation to make payments in the same way that debt financing does. Therefore, it does not fall into the same category as other forms of debt financing, which require repayment of principal and interest.

Mezzanine debt, convertible securities, and bank debt all pertain to traditional debt financing avenues. Mezzanine debt typically involves subordinated debt instruments that are often unsecured and include an equity component. Convertible securities are hybrid instruments that can be converted into equity, effectively granting the holder both debt and equity characteristics, but they still begin as a debt obligation. Bank debt refers to loans provided directly by banks, representing a clear debt financing option that requires regular interest and principal repayments.