Edit* Didn’t realize that the conversion option doesn’t cost anything - answered my own question.
Options always cost something.
There is no cost to exercise the conversion option though - i.e. no strike price - correct?
Was originally confused why the minimum value for a convertible bond respective to the option component was the market value of the underlying - had thought that the conversion price was essentially a strike price and that it should be deducted from the market value of underlying.
The cost is the market value of the bond: you trade it in for the stock.
But there’s no additional cost; you’re correct.