Question

In which sentence does the hyphen correctly divide a word?

Answer 1

Assume that the word that is divided is "puppet."
The proper syllabication of the word puppet is this one -- pup - pet.
So, "My little brother laughed at the pup-pet show." 
Proper hyphenation is done via syllable by syllable.

Answer 2

My little brother laughed at the pup- pet show.

The hyphen (‐) is a punctuation mark employed to join words and to separate syllables of a single word. Hyphenation is the how the use of hyphens is known.  A hyphen  should be used in a compound modifier when the modifier comes before the word it’s modifying. We can use hyphens to make compound words, most commonly compound nouns. In this case the words joined with a hyphen should be PUP and PET.