Abstract: This paper examines the impact of debt finance over the enterprise investment be havior using the real option method under stockholder-bondholder conflicts and debt constraint on the investment trigger. Numerical solutions show that stockho lders choose to exercise the investment option too early compared to the unlevel ed enterprise. Compared with value-maximizing policy, stockholders are inclined to overinvestment under the equity-maximizing investment policy, which affects the investment option value and optimal leverage choice, and does harm to the interests of bondholders. When debt constrained, the enterprise decreases the investment trigger first, and then increases it as constraints become more binding.