Subtraction makes sense here as you are trying to find the excess yield of equity over dividend. A yield of bond: 0.5, equity 4 vs bond: 1, equity: 4.5 doesn't

Subtraction makes sense here as you are trying to find the excess yield of equity over dividend. A yield of bond: 0.5, equity 4 vs bond: 1, equity: 4.5 doesn't change his argument, but changes the ratio significantly.