This study examines the different characteristics of adopting private debt, corporate bonds, and bank debt in the Taiwanese listed companies that obtained new debt financing from 2002 to 2004. The Logistic Regression Model is performed to find out the main determinants to affect the choice of debt instruments, and Two-Stage Least Squares is used to examine the effects of different debt instrument on equity risk. The results are as followed: 1. The higher the flotation cost the higher the possibility of the firm to choose issuing public bonds. On the other hand, the lower the flotation cost the higher the possibility of the firm to choose issuing private debt. 2. Firms with the highest information asymmetry tend to borrow from banks, and those with the lowest information asymmetry are likely to issue public bonds. 3. Firms with the highest credit quality exhibit a strong preference for public bonds, firms with middle credit quality prefer to borrow from banks, and the lowest credit quality prefer to borrow from private debt sources. 4. Firms with the lowest managerial ownership tend to borrow from private debt. 5. As to the equity risk from the debt sources, it increases with the size of the corporate bonds or private debt, and decreases with the size of the bank debt.