Comparing Procter & Gamble Debt to Equity

As if it isn't already telling enough that the dividend yield on the S&P 500 is higher than the 10 year treasury yield, here's another sign that stocks are extremely cheap to bonds: the difference in the yield on a 23 year P&G bond (quote via Scottrade) and the dividend yield on its equity is just 60 bps.

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Unlike S&P 500 dividends and Treasury coupons, Procter's coupons and dividends are paid out of the exact same cash flow, which was $13.2B in 2011. Yet the relative price of Procter's debt vs. equity makes it look like these are securities from two totally different companies.

If P&G's earnings power is less certain than it once was (as suggested by the high dividend yield), then why is the debt yield so low? Conversely, if the earnings power is stable (as suggested by the low debt yield) then why is the dividend yield so high?

At these yields, an equity investor is essentially buying a free call option on Procter's growth. Considering that P&G has raised its dividend every year for the last 56 years, that seems like a pretty safe bet.