The article investigates how Tobin's Q and debt overhang affect a firm's investment levels in a sample of US businesses. According to the findings, high levels of debt can reduce investment due to the debt overhang effect, which limits firms' capacity for external financing sources. The study shows that companies with higher Tobin's Q values have lower investment levels, suggesting they are less sensitive to interest rate changes and can therefore afford to invest more. However, the findings also indicate that high debt levels reduce investment in all firms, regardless of their Tobin's Q value. The author concludes that while high debt may not necessarily harm investment for businesses with low Tobin's Q values, it can still negatively affect investment due to the debt overhang effect.