In investment theory, how do value investors such as Warren Buffett and Seth Klarman fundamentally distinguish 'Price' from 'Value'?

[ A ]Price is fixed perpetually by the Ministry of Finance, whereas Value is the daily intraday high on the stock exchange.

[ B ]Price and Value are always mathematically identical in all stock markets at all seconds of the day.

[ C ]Price is what you pay in the market driven by daily supply, demand, and trader emotions, whereas Value is the discounted present worth of all future cash flows and earnings generated by the underlying business assets.[ CORRECT ]

[ D ]Price measures only corporate tax rates, while Value measures the number of employees in a company.

Takeaway

Option C is correct: Price is what you pay in the market driven by daily supply, demand, and trader emotions, whereas Value is the discounted present worth of all future cash flows and earnings generated by the underlying business assets.

Derivation

The cornerstone of value investing is that Market Price and Intrinsic Value are distinct: Price is the observable dollar or rupee quotation set in the secondary market by buyers and sellers, often influenced by short-term sentiment, macro noise, and market panic/euphoria ('Price is what you pay'). Value is the present discounted value of all future cash flows that the business can generate over its remaining economic life ('Value is what you get'). The objective of research is to identify substantial divergences where price is significantly below intrinsic value. This tests core valuation philosophy. The common error is assuming markets are always perfectly efficient.

Why the others fail

A — Price is fixed perpetually by the Ministry of Finance, whereas Value is the daily intraday high on the stock exchange.

Secondary market prices fluctuate freely on stock exchanges, while intrinsic value reflects fundamental business cash flows.

B — Price and Value are always mathematically identical in all stock markets at all seconds of the day.

Market prices frequently deviate above or below fundamental intrinsic value due to market psychological swings and cycles.

D — Price measures only corporate tax rates, while Value measures the number of employees in a company.

Price reflects current market valuation and intrinsic value reflects DCF earnings power, not tax rates or headcount counts.