The purpose of this research is to investigate the role of debt capacity on firm’s simultaneous decision of leverage and debt maturity in reducing underinvestment problems among firms listed in Tehran Stock Exchange. In order to attain research purpose,  the required data of 100 companies during 1388 to 1393 were selected. For testing research hypothesis, we employ dynamic system analysis of generalized method of moments and logit regression. The results indicate that firms with lower debt capacity use debt maturity and leverage as strategic substitutes to solve underinvestment problems. However, firms with high debt capacity exacerbate the underinvestment problems by choosing the inappropriate solutions. Our results is consist with the packing order theory, but is opposite off maturity matching theory.