Final answer:
The debt-equity ratio is a financial ratio that compares a company's total debt to its total equity. In this case, the total debt of SME Company is $364,000.
Step-by-step explanation:
The debt-equity ratio is a financial ratio that compares a company's total debt to its total equity. To calculate the debt-equity ratio, you divide the company's total debt by its total equity. In this case, the debt-equity ratio is 0.70, which means that for every dollar of equity, the company has $0.70 of debt.
Given that the total equity of SME Company is $520,000, you can calculate the total debt by multiplying the equity by the debt-equity ratio. Total debt = Debt-equity ratio * Total equity = 0.70 * $520,000 = $364,000. Therefore, the total debt of SME Company is $364,000.