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What is the abnormal net income model? Where does the entrepreneur show up in this model?

What is the abnormal net income model? Where does the entrepreneur show up in this model?
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It is also known as the residual income model. The model is actually a method for predicting the prices of stock. The model is based on the expectation and if investors are expecting the company to be able to earn a normal rate of return then every stock is worth its book value. The model indicates that the market value of the price of a share of a stock goes up when the Expectations about the future net income are strong. The role of entrepreneur is very important in this model. The company may be able to on abnormal profit for a longer period of time depending upon how fast its competitors are able to react and drive its profit down to zero. This speed at which the abnormal net income is reduced to zero is the rate at which the entrepreneur is able to create something or compete with other firms.

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