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There are many who claim that value is based on investor perceptions, and perceptions alone, and that cash flows and earnings do not matter. This argument is flawed because DaValue is determined by earnings and cash flows, and investor perceptions do not matter b. Perceptions do matter, but they can change. Value must be based on something moru substant Oc Investors are irrational. Therefore, their perceptions should not determine value. Od Value is determined by investors' perceptions, but it is also getermined by the underlying earnings and cash flows. Perceptions must be based on reality