Dunbar Company had 500,000 shares of common stock outstanding during the year 2015. In addition, at December 31, 2013, 90,000 shares were issuable upon exercise of executive stock options which require a $40 cash payment upon exercise (options granted in 2013). The average market price during 2015 was $50.

I need the explanation of the problem. For me its coming 50-40/50*90000 which is 18000 and total out standing share is 500000+18000=518000. I am getting the answer wrong. Please let me know where I am mistaken. Kindly elaborate your answer.