Working with friends...yikes. I avoid that like the Spanish Influenza.
Doing the initial web creation and being paid in shares isn't common. If a majority of the business presence is interweb'd and the designer is also maintaining, then yes. In such case it is usually more of a partnership.
$5 / month hosting is probably reasonable, depending on what services you provide. Backups?
As for site creation, I'd set up an "Under Construction" page for free, most likely, in the interest of getting more business out of him. If you don't think that is a likely scenario, something like $5 - $10 for a simple page isn't unreasonable.
For the entire venture and additional work? Well a price estimate there depends on requirements and amount of work you'd have to put in to it to determine approximate value.