In this paper, we aimed to study the effect of doping of the compound CdTe with the cobalt impurity (Co), as well as the vacancy defects in Cd sites. On one hand, this leads to the investigation of the magnetic properties and the Faraday rotation effect for the studied alloy, doped with different concentrations of cobalt (0.01, 0.05, 0.1, 0.15, 0.2, 0.25). On the other hand, we have created 0.01 of vacancy defects in Cd sites. Then, we raised the vacancy defect concentration to 0.05, keeping the same concentrations of cobalt. As a result, we have investigated that there is a magnetism appearing with the cobalt doping, while the vacancy defects in Cd sites affect the stability of the magnetic states. In general, it improves the ferromagnetic state that will be well explained in the discussion. Our calculations were performed using the KKR-CPA method within the spin-polarized density functional theory (DFT) with the local density approximation (LDA). The curves of the density of states (DOS) illustrate the results of this study which has been discussed, analyzed, and explained below. In addition, the energy of each case was calculated and given in the tables below for both the DLM (half of the cobalt spins are up while the other half are down) and the ferromagnetic state in order to confirm which one of them is stable.