How do you know that the outstanding shares of 20,000 should be mutplied by one half? I know the answer, but i dont understand the background of how to get the answer.

The following information pertains to Jet Corp.'s outstanding stock for Year 2 . What are the number of shares Jet should use to calculate Year 2 earnings per share? A. 40,000 B. 45,000 C. 50,000 D. 54,000 Explanation Choice " B " is correct. 45,000 shares should be used to calculate Year 2 EPS