I've finally saved up enough money for one of the more expensive mercs, but when I try to hire him he says no. Why is this?

Each merc has different personalities and sometimes they need a recommendation from a friend or something, or sometimes they just won't work with certain other mercs. Who are you trying to recruit and what did he say?

I know that when I hired Igor, he mentioned that since he had heard good things from Grunty (who was on my team) that he would accept my recruitment.

I'm trying to hire Shadow, but he just says "No sir, I'd prefer a leader who inspires more confidence."
 
I'm not really sure what that means.

If I were to guess I'd say morale for your current squad needs to be higher. See if they have any traits that you can use to bring up their morale. For example Fox has the nudist trait and her morale will go up if she's not wearing any armor. I haven't really played enough to actually tell what raises morale outside of those things though.

For morale in general, aside from the specific traits that Fearbeard mentioned, in JA2 you generally had to just keep guys in good health and keep winning sectors (make sure they don't get shot too much, give them some kills, etc.) I would imagine that for some of those higher level guys, you probably have to own a certain percentage of the map or have completed some number of quests.

On a similar topic, where is the indication for how much each merc costs? It's probably right in front of my face, but I was looking for the dollar value and couldn't find it.