Why is debt management leveraged? How to use financial leverage? If debt is good for enterprises, then why sell stocks for financing?

Debt management will generate debt costs, such as 6%, but the income generated by the company's borrowing for one year may far exceed 6%, which may be 16%. In this way, without increasing the owner's investment, the income will increase or the profit rate of net assets will increase. This is the leverage effect. Reasonable use of loan and debt leverage. However, excessive debt will lead to financial risks. If the operation encounters problems, the profit rate will be damaged, or even the payment will be trapped, which will seriously lead to bankruptcy. Giant Group is a typical example. Selling stocks is to invite more investors to invest in the company's business. On the one hand, it can spread investment risks, on the other hand, it can gather more social funds for business development. In particular, the shares issued to the public are also conducive to improving the company's visibility and expanding its influence. These are intangible assets of the company, but they can't be quantified yet. If the company is sold, it will be reflected in goodwill.