The correct answer is C) metacentric height is positive. The stability of a vessel is determined by its metacentric height (GM), which is the distance between the center of gravity (G) and the metacenter (M). When the metacentric height is positive (GM > 0), the original equilibrium position is stable, meaning the vessel will return to its original upright position after a small disturbance. The other options are incorrect because: A) KG (vertical center of gravity) exceeding the maximum allowable limits does not necessarily indicate a stable equilibrium position; B) a positive metacentric radius (BM) is a factor in determining stability but does not directly indicate a stable equilibrium; and D) excessive free surfaces can reduce the vessel's stability, but a positive metacentric height is the key condition for a stable equilibrium position.