alternative2. how well the Stakeholder does its Stakeholder-Functions.
alternative3. how well the Stakeholder-Functions perform.
Each alternative is really the same, but 2 & 3 are more precise.
Stakeholder-Values describe how well the Stakeholders does what they do as they core business.
Stakeholder-Values exist without the products we are building and using.
Stakeholder-Values should practically never be explaining how well a Product works.
A Stakeholder would normally have their Stakeholder-Values, irrespective of the Product you are developing. It relates to how well they do, or their business do.
Your Product, with its Product-Values (e.g. Usability), can become the Solutions to satisfy a Stakeholder-Value.
Illustration: a Stakeholder with arrows representing how well (Stakeholder-Value) the Stakeholder does her Function (Job, Hobby, Life). She may or may not use a Product to help her do what she does so well.