This paper studies enterprise investment decisions under debt agency conflicts by the method of real option. It is different from the existed literatures that this paper considers not only the influence of investment goals alienation on investment decisions without bankruptcy agency, but also analyzes the investment decisions distortion under bankruptcy agency conflicts. The study result shows that enterprises with debt usually exist overinvestment; on the one hand, the overinvestment comes

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... excessive pursuing of the tax benefits under the investment goals alienation, on the other hand, it comes from the protection for shareholders' investment risk under strategic default bankruptcy. What's more, under the lower debt level, the former is the dominant mechanism for investment decisions distortion; while under the higher debt level, the influence of the later is prominent.