[JackFr]

Issuing debt to buyback stock isn’t ‘financial engineering’ its trying to address the fundamental problem of corporate finance. You have two sources of capital, debt and equity. What is the optimal capital structure of the firm.

There is no moral component as to whether a firm should be financed with debt or equity. While EPS has a smaller denominator, it also has a smaller numerator as earning will reflect the interest payments on the debt.