In situ ellipsometry and Kerr polarimetry have been used to follow the continuous evolution of the optical and magneto-optical properties of multiple layers of Co and Pd during their growth. Films were sputter deposited onto a Pd buffer layer on glass substrates up to a maximum of N = 10 bi-layer periods according to the scheme glass/Pd(10)N×(0.3Co/3Pd) (nm). Magnetic hysteresis measurements taken during the deposition consistently showed strong perpendicular anisotropy at all stages of film growth following the deposition of a single monolayer of Co. Magneto-optic signals associated with the normal-incidence polar Kerr effect indicated strong polarization of Pd atoms at both Co-Pd and Pd-Co interfaces and that the magnitude of the complex magneto-optic Voigt parameter and the magnetic moment of the Pd decrease exponentially with distance from the interface with a decay constant of 1.1 nm^-1. Theoretical simulations have provided an understanding of the observations and allow the determination of the ultrathin-film values of the elements of the skew-symmetric permittivity tensor that describe the optical and magneto-optical properties for both Co and Pd. Detailed structure in the observed Kerr ellipticity shows distinct Pd-thickness-dependent oscillations with a spatial period of about 1.6 nm that are believed to be associated with quantum well levels in the growing Pd layer.