Watkins, Inc., has experienced an explosion in demand for its ram football novelties. The firm currently (time 0) pays a dividend of $0.50 per share. This dividend is expected to increase to $1.00 per share 1 year from now. It is expected to grow at a rate of 20 percent per year for the next 7 years. Susan seeks your advice regarding the current value of this stock. Susan plans to purchase this stock today, if the price is right, and to hold it for 3 years. She believes that the stock will increase in value to $40 at the end of 5 years. What is the current value of this stock to Susan if she requires a 20 percent rate of return on stocks of this risk level?