Its negative effect. Rest assured that the cost of stock options and RSU must be accounted accordingly, to affect net earnings. If the management are able to embezzle a big portion of the earnings to issue options and RSU to their pocket, it will not be done without enraging shareholders. And their fate will soon be determined.
As for issuing debt to buy back stocks, if I ran a business, I would do so. In low rate environment, it's almost free money from Fed. The cost of issuing stocks is often higher than issuing debt. If I can borrow with low cost, to buy back high cost stocks, within a safe limit, why not? Doing so benefits the current shareholders.
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